Oil Industry Leader Sends Message to Congress

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Oil Industry Leader Sends Message to Congress

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American Petroleum Institute President Jack Gerard sent a letter to members of Congress Friday.  Below is the text of that letter with helpful links added (by me):

Dear Member of Congress:

As the Congress prepares for its April recess, restoring America’s economic health remains at the top of the nation’s agenda.  If we are to get America back on the road to economic recovery, it is vital that we meet the energy needs of U.S. consumers today and in the future.  Energy means jobs, economic growth, and global competitiveness.  Now more than ever, we must embrace policies that reflect the realities of America’s energy challenges.

We need more of all sources of domestic energy to power America’s economy. We do not have the luxury of picking winners and losers among our energy sources. Transitions to new energy sources don’t happen overnight. We need a multi-pronged approach that includes renewable energy and increased energy efficiency.  But our approach must also include oil and natural gas, which the Energy Information Administration projects will be our leading energy sources for decades to come.

America’s need for energy will grow even greater once the global economic crisis ends. Secretary of Energy Steven Chu recently said that he expected the need for oil to grow when the recession ends.  Similarly, International Energy Agency executive director Nobuo Tanaka said he anticipated an increase in energy demand beginning next year and warned of a “supply crunch” if there is not enough investment in energy production. Most recently, the respected energy research firm, CERA, cautioned that sharply reduced investment and low oil prices could cause a dramatic decrease in future oil supply. (See also CERA.)

The U.S. oil and natural gas industry has the expertise and technology to produce the energy we need to fuel economic growth, create jobs, generate significant revenues for local, state and federal governments, and bolster our national security. However, our companies cannot do so if held back by harmful, counter-productive taxes and are restricted from access to domestic oil and natural gas resources that the country urgently needs.

Unfortunately, the administration has put forth budget proposals that call for billions of dollars in new taxes and fees on the oil and natural gas industry.  If imposed, these taxes and fees could have a debilitating effect on our economy, when our nation can least afford it. They would reduce investment in new energy supplies, meaning less energy produced for American consumers.  We cannot tax our way out of our energy problems. (See also Attempts to Tax Nation Into Prosperity Don’t Work.)

Moreover, the current economic crisis is affecting the U.S. oil and natural gas industry.  Falling energy demand has forced reductions in new energy investments. Companies have laid off thousands of workers and had billions of dollars in budget cuts and canceled or delayed projects. The economic downturn is making it more difficult for our industry to meet the future energy needs of our economy. Imposing new taxes on the industry at this difficult time will only make a bad situation much worse and discourage needed investment.

Another vital need is increased access to domestic energy resources.  Last fall, Congress did the right thing when it responded to the public’s strong support for increased oil and natural gas development and lifted the moratoria from our Atlantic and Pacific coasts.  A recent poll found that more than 60 percent of Americans continue to support new offshore development.  We need to develop these oil and natural gas resources to meet our future energy needs. (See also President Obama, Democrats Ignore Fact: Drilling Holds $1.7 Trillion in Economic Stimulus Potential.)

A recent ICF International study found that developing off-limits areas of the Outer Continental Shelf (OCS) could generate $1.3 trillion for local, state and federal governments - and, if you include off-limits areas onshore, the revenue estimate jumps to $1.7 trillion. The study also found that 160,000 jobs would be generated in 2030 if all off-limits offshore and additional new off-limits onshore areas were open for development. Many would be exploration and production jobs, which pay more than double the national average. Developing our domestic resources would not only ensure that we have the energy we need to power America, but it would create much needed jobs and revenue for local, state and federal governments. (See also Report: Increased Drilling Generates Revenue, Creates Thousands of Jobs, Boosts Energy Security.)

Unfortunately, a pattern of delay is emerging when it comes to developing America’s oil and natural gas resources.  Recent examples of delay are the Interior Department’s decision to extend the comment period for the MMS Draft Five-Year Plan and pushing back the second round of oil shale research and development leases, as well as Governor Kaine seeking to delay the proposed Virginia offshore lease sale. (See also Petroleum Industry’s Cautious Optimism Dissolving.)

We cannot afford to delay addressing our nation’s energy challenges. Every day we delay costs American jobs, reduces revenues to local, state and federal governments, and undermines our national security. We need to restore America’s economic health and ensure our energy security today and in the years ahead.  API stands ready to work with you as the Congress addresses the urgent energy and economic challenges facing our country.

If you agree with me and think we should do everything possible to reduce our country’s dependence on foreign sources of oil and natural gas, TAKE ACTION NOW! One great way to do that is available at this link.

-- Bob McCarty Writes