Citing a study commissioned by the American Petroleum Institute, the largest oil and gas industry trade group, Republican presidential candidate Rick Perry claimed he could create over a million jobs by expanding domestic fossil fuel production. That estimate is based on highly dubious assumptions, but several news outlets have uncritically repeated it.
Michael Levi, an energy expert at the Council on Foreign Relations, did what so many news media outlets have proven unable or unwilling to do, and actually scrutinized API's numbers. He concluded that they are "unrealistic":
The numbers that Perry and Romney are offering for job creation in the energy sector are unrealistic. They assume that they will be reversing deeply anti-industry Obama policies that don't actually exist (which is not to say that the Obama policies have no flaws), ignore real constraints at the state level, and don't fully account for market dynamics. Five hundred thousand is a reasonable upper limit for the number of jobs that a new policy might create by 2030, of which 130,000 or so might actually be in oil and gas. Taking into account market dynamics could lower those numbers further.
The Washington Post also recently reported that that "only a third of the 1.4 million positions created would go to people working directly for the petroleum industry." API's job creation estimate includes "a seldom-used category known as 'induced jobs' that API says covers everything from valets to day-care providers, from librarians to rocket scientists," according to the Post. The article added that energy economist Philip Verleger said "The API is the best there is at lying with statistics."
Yet according to a Nexis search, several news outlets simply repeated Rick Perry's claim that his energy plan could produce more than one million jobs.
The Boston Globe, The Wall Street Journal, Reuters and NBC's Today repeated Perry's claim without noting the unrealistic assumptions behind it, or that it came from an industry-funded study. And The Christian Science Monitor repeated Perry's claims and then actually suggested that they are correct, relying heavily on conservative economist Peter Morici:
Is Perry right that energy is a ripe field for job creation?
Not all economists would put domestic energy production among their top five priorities for job growth. But many do see significant potential in this field, as the Perry campaign does.
For example, economist Peter Morici at the University of Maryland, in a recent analysis of the nation's employment crisis, wrote that "shutting down US oil and gas development is costing the US economy millions of jobs."
His view: An emphasis on domestic production could create jobs by dramatically reducing America's trade deficit, thus recycling more consumer dollars in the domestic economy. Promotion of energy production would also spill over into job creation in other industries, Mr. Morici says, as a need for refineries and pipelines boosts demand for construction workers, steel, and heavy machinery.
In eight segments or news briefs the day of his speech, CNN uncritically repeated Perry's claim. Fox News' Special Report and Fox News Sunday did the same, and Eric Bolling said on The Five that "if [Perry] opens up drilling," he could "easily produce a million jobs."
Update (10/18/11): Levi has written further analysis after finding that Perry is relying on additional sources. After digging into the assumptions Perry would have to make in order to come up with 1.2 million jobs, Levi concludes that this jobs number looks even "less realistic."
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- Economy, Jobs, Wages, & Unemployment, Environment & Science, Drilling, Energy
- Fox News Channel, Wall Street Journal, FOX Broadcasting Company, NBC, CNN, Reuters, Christian Science Monitor
- Eric Bolling, Peter Morici
- FOX News Sunday, Today Show, The Boston Globe, Special Report with Bret Baier, The Five