The surest way to rejuvenate our ailing economy, create American jobs, and strengthen our energy security is through an "all-of-the-above" energy policy that encourages production of our vast domestic resources. We can and should utilize all of the energy available to us, including natural gas, oil, coal, and nuclear - along with emerging alternative energy sources like wind, biofuels, geothermal, and solar. A new non-partisan government report shows that America is an energy-rich nation. The Congressional Research Service found that America's combined supply of recoverable natural gas, oil, and coal is the largest on Earth.
In fact, the CRS reports that America's recoverable resources are far larger than those of Saudi Arabia (3rd), China (4th), and Canada (6th) combined - and that's without including America's immense oil shale and methane hydrates deposits. Additionally, just-released Department of Energy statistics show that the United States has eclipsed Russia as the world's largest producer of natural gas.
To the detriment our energy security and the economy, the Obama administration - through, in some cases, explicit regulations and purposeful inaction - is keeping much of our abundant energy supply off-limits. As with most of my colleagues, I appreciated President Barack Obama's support for nuclear energy and natural gas during his State of the Union address last month. But the release of the Obama budget just one week later told a much different story, especially when it comes to natural gas.
The Obama administration's 2011 budget - once again - proposes a crippling tax increase on America's homegrown natural gas and oil industry - specifically, $36.5 billion of new taxes, which would be paid by consumers in the form of higher heating bills and higher prices at the gas pump. (It's worth noting the stubbornness of this administration: This tax comes after Congress rejected Obama's $31 billion energy tax increase in last year's budget.)
In his State of the Union address, President Obama pledged to put America back to work. The domestic oil and gas industry is a great place to start. Last September, PricewaterhouseCoopers released a report finding that "the U.S. oil and natural gas industry's total employment contribution to the national economy amounted to 9.2 million full-time and part-time jobs, accounting for 5.2 percent of the total employment in the country ... The industry's total value-added contribution to the national economy was over $1 trillion, accounting for 7.5 percent of U.S. GDP in 2007."
But the benefits of affordable, abundant, and domestic energy production don't stop there: hundreds of thousands of land and mineral owners - some of whom are farmers and ranchers - from 33 producing states receive monthly checks from natural gas and oil royalties produced on their properties. And states receive tens of billions of dollars in natural gas and oil excise and severance taxes that support roads, schools, and law enforcement. Yet by punishing America's oil and natural gas industry with new taxes, President Obama is impoverishing states, harming consumers, and stifling creation of new jobs.
Those who ignore history are condemned to repeat it: that's one of the unfortunate lessons of the Obama energy tax. Just turn back the clock to 1980. Then-President Jimmy Carter imposed a similar tax on the oil and gas industry, ostensibly to increase our energy independence and lower prices at the pump. It didn't work. A government report from CRS later found the following: "The WPT [windfall profits tax] reduced domestic oil production between 3 and 6 percent, and increased oil imports from between 8 and 16 percent ... This made the U.S. more dependent upon imported oil."
Punitive energy taxes didn't work in 1980, and they won't work now.
President Obama appears to suffer from an energy cataract. So-called "green energy" is all he can see - while all other forms of energy are punished or ignored. And what has American gained? The Los Angeles Times noted recently that "[President] Obama promised to create some 5 million green jobs over a decade. The stimulus bill approved last year allocated billions of dollars to the clean energy sector ... Last month, government economists released their first tally of clean energy jobs created or saved by the stimulus: 52,000."
These results are simply tragic, given that millions of new jobs can be created through a few simple policy reforms - reforms that will, among many other benefits, make energy more affordable and reliable. President Obama has stressed the need for bipartisanship to jumpstart America's economy. I agree, and the solution is ready at hand: it's called American energy, in all its forms.
