There’ve been downsides to Alberta’s energy-driven economic boom. My wife and I often whine about Calgary’s staggering traffic, its freeways sometimes resembling rush hour even at 2 a.m. There’s an increasing chippiness and remoteness among more and more people. It’s not just the hordes of newcomers; we locals are losing our friendliness and familiarity. The CEO of a hydraulic-fracturing company snorted the other day that a fine meal in a lovely restaurant in San Francisco was cheaper than Earl’s in Calgary.

During vacations, we can’t wait to get out of Alberta. The typically empty highways across Montana and Wyoming help make our summer camping trips a pleasure. They evoke a simpler, slower pace of life. Eventually, however, one of us begins musing about the reasons behind the virtually deserted highways. We start to notice the dying towns, the boarded-up businesses, the decaying homes and commercial buildings, the huge proportion of ancient vehicles, the defeated-looking people.

And then the talk turns to the U.S., now in Year 6 of low to zero growth. Millions of people are unemployed or underemployed. Worst is the lost generation of young people, mired in their parents’ basements.

Yet, every now and then, we’ll see a gleaming new pickup truck, all kitted out with huge tires and drug-dealer rims. Two or four young guys will hop out and swagger into the fly-fishing or mountain-biking shop, confident as all get out, and begin buying everything in sight. The proprietor will roll his eyes and sigh, “Time off from the North Dakota oilfields.”

Amid the U.S.’s near-recessionary state, the country’s economy has one shining star: the oil and gas sector. Although it is less talked about than the energy sector in Canada, the U.S.’s is far larger. U.S. oil production is surging, and the U.S. is about to become a net natural gas exporter. The U.S. energy sector generates approximately US$1.2 trillion per year – 8% of that country’s economy. Experts estimate that the energy boom adds 0.5-1% to the U.S. real gross national product. That would be about half of GDP growth in 2013.

According to the U.S. Energy Information Administration, while total U.S. private-sector employment increased by only 1% from 2007 through 2012, oil and gas sector employment surged by 40%. Amid a sea of unemployment, this sector is suffering a labour shortage. North Dakota has the lowest unemployment rate in the U.S. Texas, the No. 1 energy producer in the country, is creating more net new jobs than the rest of the U.S. combined.

In Canada, oil and gas also drive the economies of the low-unemployment provinces. Statistics released in mid-July show that Alberta has been the only province generating net new employment over the past year.

It made me think of Winston Churchill’s famous dictum: “Democracy is the worst form of government, except for all those other forms that have been tried.”

One could also say that energy production is the worst way to drive an economy – except for all the rest.

More of George Koch’s writing can be found at www.drjandmrk.com.

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