By Sen. James Inhofe (R-Okla.) - 02/23/10 01:01 AM EST
The Obama administration’s 2011 budget — once again — proposes a crippling tax increase on America’s homegrown natural gas and oil industry — specifically, $36.5 billion of new taxes, which would be paid by consumers in the form of higher heating bills and higher prices at the gas pump. (It’s worth noting the stubbornness of this administration: This tax comes after Congress rejected Obama’s $31 billion energy tax increase in last year’s budget.)
In his State of the Union address, President Obama pledged to put America back to work. The domestic oil and gas industry is a great place to start. Last September, PricewaterhouseCoopers released a report finding that “the U.S. oil and natural gas industry’s total employment contribution to the national economy amounted to 9.2 million full-time and part-time jobs, accounting for 5.2 percent of the total employment in the country ... The industry’s total value-added contribution to the national economy was over $1 trillion, accounting for 7.5 percent of U.S. GDP in 2007.”
But the benefits of affordable, abundant, and domestic energy production don’t stop there: hundreds of thousands of land and mineral owners — some of whom are farmers and ranchers — from 33 producing states receive monthly checks from natural gas and oil royalties produced on their properties. And states receive tens of billions of dollars in natural gas and oil excise and severance taxes that support roads, schools, and law enforcement. Yet by punishing America’s oil and natural gas industry with new taxes, President Obama is impoverishing states, harming consumers, and stifling creation of new jobs.
Those who ignore history are condemned to repeat it: that’s one of the unfortunate lessons of the Obama energy tax. Just turn back the clock to 1980. Then-President Jimmy Carter imposed a similar tax on the oil and gas industry, ostensibly to increase our energy independence and lower prices at the pump. It didn’t work. A government report from CRS later found the following: “The WPT [windfall profits tax] reduced domestic oil production between 3 and 6 percent, and increased oil imports from between 8 and 16 percent … This made the U.S. more dependent upon imported oil.”
Punitive energy taxes didn’t work in 1980, and they won’t work now.
President Obama appears to suffer from an energy cataract. So-called “green energy” is all he can see — while all other forms of energy are punished or ignored. And what has American gained? The Los Angeles Times noted recently that “[President] Obama promised to create some 5 million green jobs over a decade. The stimulus bill approved last year allocated billions of dollars to the clean energy sector … Last month, government economists released their first tally of clean energy jobs created or saved by the stimulus: 52,000.”
These results are simply tragic, given that millions of new jobs can be created through a few simple policy reforms — reforms that will, among many other benefits, make energy more affordable and reliable. President Obama has stressed the need for bipartisanship to jumpstart America’s economy. I agree, and the solution is ready at hand: it’s called American energy, in all its forms.
Inhofe is the ranking Republican on the Senate Environment and Public Works Committee.