Last week, a study was released regarding the economic and financial benefits of developing our country’s vast oil and gas reserves that have been kept off limits for decades. The study, released by the American Petroleum Institute (API), stated what many pro-domestic energy members of Congress and people across the country have long believed: producing more of America’s energy resources will create tens of thousands of jobs, generate an enormous amount of tax revenue, and help increase our energy independence.
ECONOMIC STIMULUS POTENTIAL
As Congress continues to debate economic stimulus measures to help our country climb out of recession, the positive economic benefits of increasing American-made energy production should not be ignored.
The API study concluded that 160,000 jobs could be created through the development of oil and gas in areas offshore that until recently had been subject to a Congressional ban, as well as the energy resources in Alaska’s Arctic National Wildlife Refuge (ANWR) and a small portion of currently unavailable lands in the Rocky Mountains.
Furthermore, the study finds that oil and gas development in these areas would generate $1.7 trillion in tax payments for state and federal governments. When these areas are added to the oil and gas deposits already accessible on federal land, the study finds that tax receipts could exceed $4 trillion over the life of the drilling operations. As the Baltimore Examiner recently noted, “those royalties could be used to pay down the $10.6 trillion national debt, stabilize Social Security, Medicare and Medicaid, and fund research and development efforts for renewable energy sources.”
The recent dramatic drop in gasoline prices may have taken the focus off the energy issue, but it hasn’t changed the law of supply and demand. Gas prices may currently be low, but $4 per gallon gas was a reality only months ago and it will likely be a reality again unless we take action.
The U.S. Department of Energy estimates that fossil fuels will continue to meet at least 80 percent of energy demand both here in the U.S. and globally through 2030, even with a tremendous growth in alternative and renewable fuels. Knowing this, it only makes sense that we quickly act to increase production of domestic energy reserves.
The API study shows that by utilizing our untapped domestic reserves, we could increase production by as much as two million barrels per day by 2030. To put this into perspective, we currently import approximately one million barrels of oil per day from Saudi Arabia. Additionally, the study found that domestic natural gas production could increase by 5.3 billion cubic feet per day, the equivalent of 61 percent of expected imports in 2030.
OPPORTUNITY TO ACT
The API report is another reminder that Congress must take action to alter our nation’s energy policy, ensuring that in addition to investing in alternative and renewable energy, we also increase the use of our own oil and gas reserves.
As we prepare to begin a new session of Congress next month, energy must remain in the forefront. If we pursue an expansive energy policy that aggressively utilizes American energy, we will create jobs, help put our economy back on track, and improve our nation’s future energy security.