From where he sits – literally, right across Lafayette Square from the White House – the U.S. Chamber’s Tom Donohue sees increased production of domestic oil and natural gas as the ace card in the high-stakes game policymakers are playing concerning the nation’s fiscal health. Energy “is our country’s true cash cow,” Donohue, the Chamber’s president and CEO, told his organization’s board of directors. “Expanding energy development is an extraordinary opportunity for America on so many levels.” He counted the ways:
- More stable and affordable energy supply.
- Manufacturing revival, built on the availability of affordable energy
- Job creation, including employment gains as a result of export markets.
- Strengthened national security due to reduced imports.
- Larger tax base stemming from increased energy activity – which will generate additional revenues for governments.
So, cash cow … Maybe not the way we’d put it, but certainly America’s oil and natural gas industry plays a large role in government revenue generation – sending $86 million a day to the U.S. Treasury – and it could do more with pro-energy development policies.
According to Wood Mackenzie’s 2011 study, these could generate $800 billion in additional revenue for governments by 2030. Shale energy development – nice shale article here by the U.S. Chamber’s Sheryll Poe – could produce more than $2.5 trillion in cumulative federal, state and local tax receipts, according to IHS Global Insight’s recent study. These totals swamp estimated revenues from the kind of energy tax increases some have proposed in the past. Donohue:
“I’ve been around this town for a long time. I think I know the difference between what’s real and what’s wishful thinking. And I’m telling you that if budget negotiators have to rely on just two buckets – spending and taxes – to control the huge deficits we’re facing, they can’t get there. We need that third bucket – and we’ve got it in energy. And it’s fuller and deeper than anyone imagined just a few years ago.”
Utilizing the energy bucket – and benefits like those cited by Wood Mackenzie – depends on access to new resources and sensible regulatory policies. The United States has vast areas onshore and offshore that are closed to energy development by government policy. At the same time, regulation should not unnecessarily block or discourage investment and energy activity.
Donohue cited a Chamber study that identified 351 proposed energy projects, many of them “green,” that have been blocked by red tape and other delays – projects that could create 1.9 million construction jobs and 790,000 permanent jobs, also known as expanding the tax base. Donohue:
“This gives you an idea of what’s possible if we streamline the permitting process, expand access on federal lands and off our shores and issue sensible regulations that are aimed at protecting the public – not shutting down prudent and legitimate energy development. … So let’s get on with America’s energy revolution.”