The political feud between Democrats and Republicans over government spending and debt are creating market turmoil and risking financial crisis in America. Congress and President Obama seem incapable of agreeing to a plan to address our nation’s long-term deficit and debt problems.
Lost in the debate is the fact that long-term recovery and debt reduction is dependent on real growth in the private sector, with the oil and natural gas industry as a fundamental part. Despite serving as the backbone of the western economy, the oil and natural gas industry faces tremendous regulatory uncertainty and delays. Leaders in government have created a hostile environment for American producers, frequently accusing them of not paying their fair share in taxes, when in fact the industry is the largest source of revenue to the federal government behind the IRS. America’s oil and natural gas industry pays over $86 million every day to the government.
Most Westerners appreciate that a healthy energy industry creates jobs and funds education, public safety, conservation and infrastructure projects. The industry supports over 488,000 western jobs with salaries that are significantly higher than state averages. Tax and royalty revenues from oil and natural gas are critical sources of revenue for local governments, especially as revenue from real estate and other industries declines.
Increased taxes on American energy companies would only make the U.S. more dependent on imports of oil from unfriendly sources, exacerbate our trade imbalance, cost jobs, harm state and local economies, and result in higher prices for consumers. Raising taxes on American energy companies will mean less energy developed here at home, and could have an enormous impact on gasoline prices.
The future of western energy is expected to be bright, as long as misguided government policies and crippling tax increases don’t stand in the way. A recent study entitled The Blueprint for Western Energy Prosperity found that by 2020 the West could produce as much oil and natural gas on a daily basis as the U.S. imports from Saudi Arabia, Iraq, Kuwait, Venezuela, Russia, Colombia, Algeria, and Nigeria combined. That production could more than double investment in the region to $58 billion annually and increase industry jobs by 16 percent.
Federal government policies, including tax increases on industry, are significantly undermining these projections of growth, investment and expansion, however. The West is supplying an increasing amount of America’s energy with a smaller environmental footprint, but misguided government action is preventing achievement of the region’s full energy potential. The Blueprint identifies government policies that are making western energy development increasingly more difficult, time consuming, and expensive, and recommends policies to overcome those obstacles.
With the ongoing debate over how to get our nation’s debt under control, we respectfully remind our leaders in Washington that America’s independent energy companies are already paying more than their fair share. With national unemployment above 9 percent, our elected officials should focus on creating jobs and reducing foreign oil imports instead of making it more difficult and costly to develop American energy. The Western oil and natural gas industry has a plan to solve some of our nation’s most pressing economic and security challenges. It’s time to use this Blueprint and rebuild our economic foundation.
Tom Sheffield is president of the Western Energy Alliance and vice president of the Pioneer Natural Resources Rockies Asset Team. EDITOR’S NOTE: This is an online-only column and has not been edited.
