Judging by last week’s speech, it seems likely that there will be another attempt to use oil companies as the “pay for” to fund programs outlined in the president’s address. If so, unfortunately this appears to be the latest effort in advocating for hiking oil and natural gas company taxes as a misguided solution to the country’s economic challenges.
The irony is that, rather than raising taxes on oil companies to subsidize jobs in other areas, the Administration has a much more effective and immediate solution right in front of it. The oil and natural gas industry stands ready, willing and able to create new jobs now – and without taxpayer support. The industry just needs the right policy settings to do so.
As I mentioned last week, a recent study shows that our industry could create 1 million jobs in under a decade and $800 billion in government revenue by 2030 if the U.S. enacted policies to support domestic oil and gas development. That’s on top of the 9.2 million jobs the U.S. oil and natural gas industry already supports.
But the problem is our industry isn’t being used to its full potential. Much of the federal acreage in this country is off-limits to oil and natural gas exploration. Permitting, legal and regulatory delays have caused roadblocks to new oil and gas development. Protests and politics have delayed infrastructure projects such as pipelines that could put thousands to work.
We could be investing more and hiring more in the United States, but access to our nation’s resources is critical. Take a look at any of the recent success stories from Pennsylvania or Ohio to see proof of how access to energy supplies can boost job growth – or just look at the latest Labor Department numbers. The oil and gas industry added more than 9,000 jobs from June to August of this year while the country’s job growth as a whole remained stagnant.
Increasing taxes on the oil industry – such as removing the economy-wide Section 199 manufacturing tax deduction or eliminating “dual capacity” provisions that support U.S. international competitiveness – is not the way to create jobs in this country.
I think one of the most overlooked – or maybe misunderstood – aspects of this whole debate is the extent of who benefits from greater domestic energy production.
Last week, the president set up a false choice – suggesting to Americans that they could choose to support oil companies OR use oil companies’ profits to support small businesses.
The fact is our industry already supports small businesses. We spend millions – if not billions – of dollars on new oil and gas projects, and that’s because we require products, services, raw materials and expertise from countless businesses, both small and large. And that’s not just in our industry – small businesses across the country often depend on demand from large corporations to grow their business and hire new workers.
That’s the type of genuine, long-term investment and job growth the country needs – but unfortunately, it’s not the kind we’re going to get with proposals like raising taxes on oil companies.
If the plan is to use oil companies, let’s use them in the right way. Put us to work so we can put other businesses to work.