If we as a nation are to work together, increase American competitiveness, reduce the deficit, and invest in innovation – all goals stated by President Obama in last night’s State of the Union address – then we cannot start this journey by casting aside one of the historic American powerhouses of economic growth and jobs.

But yet, that is what the president seemed to do last night to the U.S. oil industry when he said, “I don’t know if you’ve noticed, but they’re doing just fine on their own,” right after what appeared to be a suggestion that the oil industry receives special tax treatment compared to other industries.

Just last week, I clearly presented the facts, taken from U.S. government reports, showing that the oil and gas industry in fact receives very little in government subsidies. Instead, legislators have called provisions in the tax code – for which many U.S. companies qualify – “subsidies” for the oil and gas industry alone in an effort to pay for government policies for which there is no budget. The real recipients of substantial subsidies are renewables and other energy projects, for which the 2009 stimulus bill alone set aside $80 billion.

In effect, unfounded assertions that the oil industry receives special tax treatment accomplish nothing – except to threaten the industry’s ability to contribute to the nation’s economic recovery. In our work, it’s not uncommon for one project alone to cost billions of dollars. That means we invest huge sums in manufactured materials, create jobs for local suppliers and contractors, and contribute substantial tax and royalty revenues for local, state and federal governments. Those are the types of projects across all industries that America needs to restart job growth and reduce government deficits – but they’re also the type that aren’t getting off the ground because of policies which attempt to pick winners and losers, using a rationale such as that outlined in last night’s State of the Union.

The Wall Street Journal published an opinion piece today that talks about the misallocation of national economic resources which results from “winner and loser” policies that favor some economic sectors over others. Such policymaking can have serious consequences – the article points to the recent boom and bust in the U.S. housing market as just one example. The article goes on to outline three simple rules that can make an economy grow faster, and picking favorites isn’t on the list:

1. Reward work: This requires government policies that support work and investment, such as lower taxes.
2. Foster innovation that increases productivity: While governments can fund basic research, the real drivers of innovation are private investment, human ingenuity, and luck.
3. Use capital – both human and monetary – more efficiently: Don’t allocate these scarce resources to less productive uses, but rather let them find their highest return. 

To cultivate true economic growth, the government should not exclude certain sources of private investment for political gain. 

The U.S. oil and natural gas industry will continue to support American jobs (9.2 million strong at last count); pay its income and excise taxes (which total hundreds of billions of dollars); and make the investments in energy projects that account for an enormous amount of U.S. economic activity (about $1 trillion a year). And with free-market policies in place, we can do even more to contribute to our economic recovery and growth.

But first, we have to dispel the notion that the oil industry is “on their own.” As one of the largest sources of private investment in the United States, we are fundamentally a part of the path forward in making the U.S. economy the most competitive in the world.