Embrace America’s energy renaissance

Institute CEO William O’Keefe published the following op-ed in the Richmond Times Dispatch – http://www.timesdispatch.com/opinion/their-opinion/columnists-blogs/guest-columnists/embrace-america-s-energy-renaissance/article_7dd17ac0-49e8-54c9-8dcd-f4bd93dc50da.html

 

During his most recent State of the Union address, President Obama had an opportunity to speak directly to the nation, to take a step away from partisan rhetoric that has informed poorly reasoned policy and step toward an embrace of this nation’s most productive and critical sector: energy.

Unfortunately, he declined to capitalize on this opportunity, choosing instead to focus on political attacks and rhetorical barbs rather than sound policy.

As has been well-reported, our nation is at the forefront of an energy renaissance. Growth in domestic energy production has created jobs, driven investment and contributed untold billions to our recovering GDP.

Job growth for fossil-fuel industries has rapidly grown since the start of the recent recession. In fact, the Energy Information Administration and Department of Labor have noted that between 2007 and 2012, employment in this industry has grown at a 40 percent rate, compared to just 1 percent elsewhere in the economy. These are remarkable figures — numbers that can’t be ignored. And with new discoveries and innovations on the horizon, this industry’s future is undeniably bright.

This brightness bodes well for the rest of our economy. Oil and gas companies are investing in the U.S. at a much faster and higher rate than any other sector. According to the Progressive Policy Institute, energy companies’ invested more than $56 billion back into the economy in 2012 alone. This type of investment has a ripple effect for our entire economy, improving our infrastructure, growing small businesses and putting Americans back to work.

Unfortunately, as was demonstrated in the State of the Union, the growth in this sector has occurred not because of government policy, but rather in spite of it. Expanded production has happened almost entirely on private land, with federal lands and waters remaining heavily restricted and off-limits. And while favored sectors — like those engaged in the production of green energy — receive billions in subsidies and preferential treatment, the oil and gas industry continues to be subjected to the highest tax rates in the nation.

If the president and his activist allies have their way, those tax rates will be pressed even higher — needlessly creating additional headwinds for an industry whose costs of doing business are already astronomical and growing.

Environmentalist groups like the Center for American Progress have long made a living off of the spread of patently and demonstrably inaccurate information about the tax rates of these companies, attempting to paint the energy industry as a recipient of handouts in hopes of politically altering tax law. While their devotion is admirable, their attention to the facts leaves much to be desired.

The New York Times — hardly an industry rag — recently analyzed the tax rates across U.S. companies, finding that ExxonMobil, Chevron, and ConocoPhillips carry our nation’s heaviest tax burden, both in terms of absolute dollars and by rate, at 37 percent. ExxonMobil recently released its 2013 tax numbers and noted that its tax burden ($9.8 billion) outweighed its profits ($9.1 billion). This is hardly the treatment of an industry on the receiving end of handouts.

The president also advocated in his speech for a “smarter” tax policy that directs more money to renewable energy generation by hiking taxes on oil producers. This, too, ignores reality. The nonpartisan Congressional Research Service finds that, between 2007 and 2013, green and renewable energy projects received 78 percent of all federal energy tax provisions. That’s nearly $70 billion. Despite this heavy level of taxpayer investment, green energy only accounts for about 9 percent of our annual energy consumption — and that number is not expected to drastically improve any time soon.

If the United States hopes to realize its best possible energy and economic future, then we must pursue policies that operate from a foundation of reality — not from a baseline of willfully misleading talking points from activist NGOs. The energy industry — accounting for 8 percent of our entire national GDP and 10 million jobs — is far too important to our economy and to our future as a global hegemon to be subject to tax policy that shoots from the hip in hopes of scoring a few cheap election-year political points.

By addressing policy questions earnestly rather than relying on crowd-pleasing rhetoric, our president can ensure a better economic state.

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