Also at stake in this debate is the health of our domestic economy. Not only does the industry support 9.2 million American jobs, affordable energy is key to productivity gains for numerous goods and services. It likewise feeds approximately $100 million daily into federal and state government coffers through lease payments, royalties, and other taxes. Ironically, allowing this activity to grow provides a better long-term prospect for deficit reduction than taxing it into non-competitiveness. And there are other lesser-known benefits.
A study into specific state pension plans to support the retirement of our nurses, teachers, fire fighters, and other public servants revealed that 3 to 5 percent of the assets were in oil and gas, earning between 9 and 12 percent returns while other types of investments were tanking. With state pension plans facing a $1.26 trillion cumulative shortfall as of the end of 2009, taxpayers would only be further imperiled if tax-hikes undercut the performance of energy companies.
If boosting taxes under the false pretense of cutting subsidies won’t lower gas prices, what will? Increased supply via expanded domestic production. The Congressional Research Service recently indicated that the U.S. has more fossil fuel reserves than any other country in the world. Market forces from Middle East turmoil aside, our own flawed energy and tax policies have either cut off, slowed down, or threaten to slow down oil and gas development in the U.S. The moratorium slashed production by a third, while cancelled exploration plans locked away billions of barrels in U.S. deep waters. Environmental Protection Agency regulations could also put upward pressure on fossil fuel prices, while new rulemaking attempts could halt the natural gas boom – one which could supply the U.S. with over a century of domestic fuel.
Slamming energy production with new taxes in the midst of high gas prices and a large deficit is tantamount to lying on a hospital bed in need of serious medical attention, and firing the doctor whose assistance you so badly need. Committing to expanded production of our vast oil and gas resources, on the other hand, would send a message to calm markets, while benefiting the U.S. with more energy jobs, government revenue, and economic growth in the process. The only place this argument becomes unclear is our nation’s capital, where political smokescreens have clouded reality.