Breaking Down Broken Arguments Against Oil and Natural Gas

Mark Green
Posted September 23, 2011

A big thanks to CNN's "Truth Squad" for weighing in on the oil and natural gas industry's assertion that it could add more than a million jobs over the next two decades with the right policies from Washington. We like talking jobs and energy, and it's great whenever someone else tees things up.

Don't get carried away. The Squad's skeptical. The Squad scores this one an "incomplete," saying the industry's jobs claim depends on changing current energy policy, which would face opposition in Congress and from the administration.

Which is EXACTLY our point!

Current policy is preventing this industry from doing more to help the economy - through job creation, investment and contributions to the federal treasury. Not to mention improving our energy security.

With different policies, America's oil and natural gas companies could be working right now on creating 1 million additional jobs by 2018 and 1.4 million by 2030 - and with them significant tax revenues for government and additional energy supplies. That's the conclusion of the Wood Mackenzie research and consulting firm. Let's say it again: More jobs, more revenues to help reduce the deficit and more energy. Blocked by current policy.

Policy is keeping federal areas, onshore and off, closed to energy development. Places like the eastern Gulf of Mexico and the Arctic National Wildlife Refuge in Alaska. Policy is affecting our energy partnership with Canada, our #1 source of imported oil, by keeping us from fully utilizing Canadian oil sands. Policy is holding up construction of the Keystone XL pipeline, which would deliver oil sands crude to U.S. refiners. Want a better energy future? Change bad energy policies.

But first, do no harm. Before a discussion of forward-looking, job-creating policies, backward-looking ones need to be discarded. These include the administration's current proposal to raise taxes on oil and natural gas companies. This, despite the fact these companies already contribute $86 million a day to the federal government in taxes, royalty payments, rents and bonuses.

We know, we know. There's lots of talk about paying fair shares. This industry already does, with a 2010 effective income tax rate of 41.1 percent - compared to 26.5 percent for other S&P Industrial companies. The fact is those taxes affect everyday consumers, everyday workers and the people who own America's oil and natural gas companies - also known as everyday Americans who own mutual funds, make individual investments and draw from pension funds and IRAs.

As for taxes and deficit reduction, we're on that. Put America's energy companies to work. With pro-development policies the industry could generate $127 billion in revenues for government by 2020 - topping the projections for the administration's tax hike proposal (which actually could reduce revenue to the government $29 million by 2020, according to Wood Mackenzie).

No question, policy change is hard where there's misunderstanding and misinformation. Some in Washington argue that greater oil and natural gas access would threaten green energy, that it would delay the development of alternative energy. Some depict a zero-sum game where investments in oil and gas take away from renewable energies.

First, there's reality. The U.S. Energy Information Administration tells us that oil and natural gas will continue to supply 55 percent of our energy in 2035. So far from being the energy of the past, oil and natural gas are today's and tomorrow's energy.

America needs all available energies for a secure future. That's why the oil and natural gas industry invested $58.4 billion in low- and zero-carbon technologies from 2000 to 2008, more than either the government or the rest of the private sector combined. We welcome a discussion of green energy technologies and guess what: We won't take the Fifth.

America should continue developing new technologies without taking abundant and accessible domestic oil and natural gas off the table. A thriving domestic industry is good for our economy and our security, displacing imported oil, not green sector jobs.

So, again, thanks Truth Squad. America faces important energy policy choices. The prospect of a robust, secure energy future beckons, but CNN is right: It's blocked by current policy. Let's change the policy and change our future.