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Wednesday, April 24, 2024

North Dakota’s economic success an ‘inconvenient truth’

I have great news for everyone who is graduating and can’t find a job. North Dakota is on a hiring spree and needs people fast.

Even the McDonald’s there is paying $15 an hour, and it can’t find enough people for the jobs.

There aren’t enough houses and infrastructure is mostly absent, but the state is sitting on hundreds of millions of dollars in surplus that can be used to meet the demands from the thousands of workers coming into the state.

Why is this state doing so well when the rest of the country is reeling? The story of this growth could well cost President Obama his re-election.

Of the 15 counties with the nation’s lowest unemployment rates, 11 are located in North Dakota. Billions of gallons of oil have been discovered in this state that were previously unreachable but are now accessible due to the constant creative destruction that is capitalism.

Natural gas fields are also located there, and the state just surpassed California as the third highest producer of energy in the country. If you’ve been to the Kangaroo lately, you know that having cheaper fuel for your car is one of the top issues hitting your budget right now.

It is true that if we released all the oil in our strategic reserves right now, it wouldn’t impact the world price that much.

However, a comprehensive energy strategy has to allow for oil to be our primary fuel for the next several decades, and government policies that put tight regulations on oil companies and discourage drilling send messages to speculators who push prices ever higher.

Even the most progressive among us would find it almost impossible to live life in the absence of fossil fuels.

The key is to make them burn cleaner and to engineer practical solutions with what we know works while we look for alternatives.

As the economy tepidly improves (and we’ve even seen that cool off recently), gasoline prices will climb ever higher, further benefiting all of those autocratic regimes in the Middle East that don’t like us.

The truth is that we have more energy in the U.S. in the form of coal and natural gas than Saudi Arabia.

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If we worked to convert vehicles to natural gas and found an efficient distribution channel, we might be able to get vehicles to burn cleaner.

It is already the case that natural gas burns cleaner than coal.

Unfortunately, instead of trying to make this technology cleaner, we do things like artificially support the price of corn to produce biofuels so cities such as Gainesville can force residents to pay through the nose for a trendy new energy plant that could be made obsolete in a few years.

The president is weak on energy as an issue. He opposed the Keystone pipeline — a fact that Republicans will be sure to repeat every other sentence as fuel prices climb.

Obama’s policies of subsidy and government guarantees go to firms that have yet to show a high-level benefit to society from a scalable technology.

I’m all for investment in companies, but I think it can be best done by venture capitalists that have some fear of losing money.

As North Dakota deals with giant surpluses and can’t build enough houses for all its new residents, the administration will have to defend why it wants to move America away from domestic energy production, which could be a huge shot in the arm to a country still recovering economically.

Driving trucks to move oil, working on a rig in northwestern North Dakota or flipping burgers for the rig workers at McDonald’s aren’t cool, flashy, green jobs, but they take a step to solving a very real problem of incredibly high fuel prices and high unemployment.

These jobs also pay much higher than the median U.S. wage.

If Romney is smart, he will drill Obama on the inconvenient truth of the economic success story in North Dakota.

If the president doesn’t start supporting domestic energy production and the creation of countless middle-class jobs, he might lose his bid for re-election come November.

Travis Hornsby is a statistics and economics senior at UF. His column appears on Wednesdays.

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