When President Obama released his proposed FY 2010 budget recently, I thought it contained some subtle (and some not so subtle) jabs at the energy industry. Oil was, after all, was every politician’s favorite whipping boy until AIG came along. And what is the AIG mess other than a government created liability to taxpayers for another generation or two.
But when Treasury Secretary Timothy Geithner let loose a tirade targeting the oil industry recently at a Senate Finance Committee hearing in DC, even I was surprised by the directness of the attack. And not much surprises me anymore.
According to Reuters, Geithner said energy companies should not receive tax breaks because they contribute to global warming.
Geithner: “We (the administration) don’t believe it makes sense to significantly subsidize the production and use of sources of energy (like oil and gas) that are dramatically going to add to our climate change (problem). We don’t think that’s good economic policy…”
Really, Mr. Geithner? Affordable energy doesn’t make sense? Jobs on our own shores are a bad idea you say?
Like it, or not, our nation’s energy security right now and for the foreseeable future depends on the development of our nation’s fossil fuel resources, namely those beneath the Outer Continental Shelf and out west.
Like it, or not, expansion of traditional domestic energy resources would lead to the creation of 1.2 million good jobs, according to the American Energy Alliance. Growing our capacity for domestic production of fossil fuels will add more than $8 trillion to our GDP and $2 trillion in additional tax revenues.
So when the president singles out the energy industry – and no other sector – and says we’re going to repeal the Section 199 tax deduction for you and only you, I don’t understand the logic. That provision alone has a price tag of $13 billion. When you tote up all of Obama’s shots, we’re talking about a $90 billion tax hit.
The energy industry is one of the few that is weathering the recession. Unlike so many others, it isn’t standing in line with its hand out, waiting for big bailout bucks. It plans to continue development of domestic energy resources to decrease our nation’s reliance on foreign oil, thereby improving both our national security and our energy security. It plans to continue to invest capital (and infuse our economy with cash) and add jobs. It plans to keep working to ensure America has a long-term supply of safe and reliable energy.
Every time Geithner and Obama bail out another derivatives gambler with freshly printed money from nowhere, they ensure a return of inflation. Inflation raises the cost of energy, like it or not.
Every time Geithner and Obama use the specter of environmental collapse as an excuse to stop exploration using safe, proven, methods of domestic production of energy they raise the cost of energy, like it or not.
When they meddle in long term contracts and investments, it costs Americans jobs, more scarce dollars for energy, and a slowdown in economic growth.
We need oil and gas right now, Mr. President. Whether we produce it here, or abroad, is your choice. Like it, or not.