The Obama administration’s forthcoming fiscal 2017 federal budget proposal probably will contain provisions harmful to the US oil and gas industry beyond the $10/bbl crude oil tax that the White House announced last week (OGJ Online, Feb. 4, 2016), two major national oil and gas associations’ top officials warned.
“It’s not as if we have to guess where the administration is going to focus when it comes to energy,” American Petroleum Institute Pres. Jack N. Gerard said. “Oil and gas production on federal lands has fallen while state governments and private landholders have helped it grow since 2008.”
The US oil and gas resurgence has helped created average savings per household of $1,200/year during that time, Gerard told reporters in a Feb. 8 teleconference. But President Barack Obama seems intent on pursuing a radical antienergy agenda instead, Gerard said.
“If the administration continues to adhere to radical thinking that pits increased energy production against climate goals, it will leave a legacy harming consumers and squandering America’s incredible opportunity to lead the world in both energy production and reduced carbon reductions,” Gerard said.
National Ocean Industries Association Pres. Randall B. Luthi, in a separate statement, said, “Rather than harming hard-working American consumers, the president should be doing everything in his power to further our nation’s position as a global energy leader, strengthen our economy, and keep energy affordable.”
Luthi said, “Instead, this administration is holding back our nation’s energy independence through unnecessary regulations like the proposed well control rule that could actually increase risk offshore, leading to a de facto moratorium in the Gulf of Mexico.” That effectively would jeopardize the sole revenue source for Land and Water Conservation Fund, which Obama proposes to double in the fiscal 2017 budget proposals, Luthi said.
Gerard said the Obama administration repeatedly has ignored economic contributions such as the 9.8 million more jobs and much lower prices resulting from the US oil and gas shale boom, and sometimes has ignored scientific evidence that progress is being made by:
• Rejecting the proposed Keystone XL crude oil pipeline after US Department of State studies suggested that doing so would increase, instead of reduce, carbon emissions.
• Implementing its Clean Power Plan despite US carbon dioxide emissions being at 20-year lows to give preference to certain kinds of renewable energy instead of giving states flexibility to freely choose among lower emitting power sources and keep electricity prices affordable.
• Issuing proposals at both the US Bureau of Land Management and US Environmental Protection Agency for regulations, which would increase gas production costs and could drive down investments.
• Resisting calls to repeal or reform the federal Renewable Fuel Standard by encouraging EPA to continue pushing for more ethanol in the national motor fuel supply, which actually would increase GHG emissions.
“The $10-tax hike proposal is just the latest and most direct expression yet of what has been an increasingly hostile campaign against American consumers,” Gerard said. “No longer constrained by electoral considerations, it seems the administration’s final months in office will be spent pursuing its true energy policy objective: to choke off America’s energy renaissance and keep fossil fuels in the ground.”
Luthi, who was a director of the US Minerals Management Service during part of President George W. Bush’s second term, said that overly prescriptive regulations deter industry innovations which make US energy successes possible, and new taxes on the industry ultimately hurt consumers.
“The president should broaden his vision by encouraging all forms of energy, so consumers have a choice of fuels at a reasonable cost,” he suggested. “His budget priorities should not be skewed in favor of any particular form of energy, but should instead leave those decisions to the American consumer.”
“It’s unrealistic to deny the reality of what we need to fuel our economy while trying to emphasize unproven possibilities,” said Gerard. “The position seems to be that even if something works, it should be abandoned to pursue an unproven ideology. Even the government’s own analysis finds that the majority of the energy we use up until 2040 is going to be oil and gas.”
Contact Nick Snow at [email protected].