- Energy Tax Facts
- 16 Jul 13
Des Moines Register (Op-Ed): Raising taxes on oil and gas hurts American energy security
The budget battles in Iowa and Washington, D.C., have again ignited the debate over national priorities. In a world of infinite wants and finite resources, our elected officials are forced to choose the best way to raise and allocate resources. Putting aside the superficial partisan squabbling, the process does illuminate what our elected officials truly care about.
Looking at President Barack Obama’s 2014 budget, spending will increase 5 percent from 2013 to 2014 and 20 percent over the next five years. There will also be $580 billion in new taxes.
It is clear that over the next 10 years, this budget will come nowhere close to being balanced. To offset some of these expenses, Obama is now taking aim at an industry he has attacked in the past, American oil and gas companies.
It is not surprising that this industry is under fire once again. Unfortunately, these additional taxes on petroleum will lopsidedly hurt already disadvantaged groups — people on fixed incomes and welfare. Obama also says we need to become energy independent, and then he attacks our American oil and gas companies.
How will attacking our own energy sector lead to greater U.S. energy independence?
A study released by Wood Mackenzie found that additional taxes on American oil and gas companies would initially generate $16 billion in government revenues over the first five years. In the long-term, however, these higher taxes on energy will lead to reduced investment in the development of new energy sources, causing a loss of $144 billion over the subsequent eight years.
In addition to a loss of government revenue, the study found that new taxes on oil and gas would produce a loss of 170,000 jobs, both directly and indirectly, by 2014. Our domestic production of oil would also drop by a whopping 700,000 barrels per day.
As a result, we would be forced to send more money overseas to meet our domestic energy needs.
Both Republicans and Democrats use budget gimmicks to contort numbers in order to bolster their side and tear down the opposition. This is not a partisan issue. The reality is petroleum fulfills a good portion of our energy needs and will continue to do so in the foreseeable future.
Moving forward, an “all of the above” strategy is the key to energy independence.
Ideally, this “all of the above” approach should embrace renewables like wind and solar, biofuels like ethanol, and oil and gas. No matter the arguments coming from industry opponents, our nation inherently relies on oil and gas, and, therefore, it must be a part of the solution. An “all the above” approach that ignores oil and gas ignores reality.
Obama and his allies have branded his budget as a fair one. What is fair about every American paying more across the board for their goods and services, while we send more money abroad to stimulate our competitors’ economies?
It is my hope that the president and his allies in Congress put political pettiness aside and make responsible decisions that will ensure a brighter economic future for our country and state.