Energy was on both candidates’ minds during last night’s presidential debate. President Obama:
“I think it’s important for us to develop new sources of energy here in America. … On energy, Governor Romney and I, we both agree that we’ve got to boost American energy production, and oil and natural gas production are higher than they’ve been in years. But I also believe that we’ve got to look at the energy sources of the future, like wind and solar and biofuels, and make those investments.”
The president rightly called for more U.S. energy output, as he has before. But the rhetoric hasn’t been backed by actions. The New York Times notes falling levels of permits to drill on public lands from 2008 to 2010 – consistent with a study from earlier this year that reported declines in federal leases, permits to drill and new wells.
So Gov. Mitt Romney was on target when he said:
“Energy is critical, and the president pointed out correctly that production of oil and gas in the U.S. is up. But not due to his policies. In spite of his policies. … Mr. President, all of the increase in natural gas and oil has happened on private land, not on government land. … If I’m president, I’ll double them, and also get the oil from offshore and Alaska. And I’ll bring that pipeline in from Canada.”
If you support more U.S. domestic oil and natural gas production, there must be more drilling to get it.
America is energy rich, and we’re going to need all energy sources for a strong economy. But the energy reality is that oil and natural gas provide 62 percent of the energy we use today and are projected to supply more than 55 percent of it in 2035 – even with growing contributions from the renewable sources the president mentioned. So we need policies that allow more safe and responsible production on public lands and off our coasts.
Energy surfaced again when the president talked about deficit reduction:
“Let's talk about corporate taxes. Now, I've identified areas where we can, right away, make a change that I believe would actually help the economy. The oil industry gets $4 billion a year in corporate welfare. Basically, they get deductions that those small businesses that Governor Romney refers to, they don't get. Now, does anybody think that ExxonMobil needs some extra money when they're making money every time you go to the pump? Why wouldn't we want to eliminate that?”
Fact: The oil and natural gas industry uses provisions in the tax code that allow companies to recover costs associated with energy production. The industry is eligible for these deductions, which are similar to, if not the same as, deductions available to many other industries. The other fact is our industry pays its fair share in taxes – and then some. Industry sends $86 million a day to the federal treasury – more than $30 billion a year – with an effective tax rate double the average for other industries.
The president cited ExxonMobil, so consider this. The company paid $57 billion in taxes over the past five years - $18 billion more than it earned in the United States. Corporate welfare? Industry contributed $476 billion to the economy in 2010 and claimed five of the top 11 spots on the Progressive Policy Institute’s “Investment Heroes” list of the top 25 nonfinancial U.S.-based companies, ranked by their 2011 capital spending inside this country.
Our industry purchased 14 percent of all capital equipment and structures in the U.S. over the past few years and has invested billions of dollars in U.S. leases and acreage, which demonstrates a commitment to future investments in domestic energy. From these investments, our industry pays billions in taxes, rents and royalties, both locally and federally to governments. This investment supports jobs across the country – 9.2 million in all. The salaries for these jobs are higher than the average salary in many states, particularly in North Dakota, Ohio and Pennsylvania. Meanwhile, our industry’s investment also has opened up huge reserves of natural gas, which is one of the reasons manufacturing is looking to return to the U.S. In fact, one study predicted that shale gas production boom could lead to approximately 1 million more manufacturing jobs by 2025.
Romney said energy is the cornerstone to his plan for job creation. Indeed, with the right policies in place the oil and natural gas industry could create 1.4 million new U.S. jobs by 2030, according to a study by Wood Mackenzie, generating an additional $800 billion in revenue to government.