Western Caucus Urges House to Consider Energy Development as a Source of New Revenues02/04/13
Washington, D.C. (February 4, 2013) – Western Caucus Co-Chairmen Steve Pearce (NM-02) and Cynthia Lummis (WY), along with Chairman Emeritus Rob Bishop (UT-01), today urged the House of Representatives to consider energy development on federal lands as a way to increase revenues without having to increase taxes on the middle-class.
In a letter to Budget Committee Chairman Paul Ryan, Rep. Pearce, Rep. Lummis and Rep. Bishop highlighted a new report by the Institute for Energy Research (IER), Economic Effects of Immediately Opening Federal Lands to Oil and Gas Leasing: A Response to the Congressional Budget Office, which explored the tremendous opportunities for job and economic growth if the Obama Administration’s barriers are removed.
They noted in the letter that, “CBO projected that offshore energy expansion would bring in $8.8 billion annually to the federal government. However, the CBO uses geological surveys that are more than three decades old in its study, leading to far lower revenue estimates. IER’s report, which is based on modern surveys that take technology such as horizontal drilling into account, shows that revenues to the federal government in the short term from increased offshore drilling activity would add another $24.1 billion on top of the CBO projection. After wells finally reached their maximum production capacity, the CBO expects more than $10 billion in annual leasing royalties, while IER projects another $85 billion in annual federal tax revenues—almost 10% of our current $1 trillion budget deficit.”
Recognizing that the President and some in Congress will insist that new revenues be part of the equation, Pearce, Lummis and Bishop offer an alternative to new tax hikes based on the information from IER’s report. In the letter, they encourage the consideration of energy production in onshore areas and the Outer Continental Shelf (OCS) as a way to generate new revenue, in addition to creating hundreds of thousands of American jobs.
Excerpts of the letter:
“IER considers another factor that is omitted in the CBO study: the impact on employment. The IER study shows that 550,000 jobs can be created annually over the next seven years and 2 million additional jobs annually in the long-term.”
“IER estimates a GDP increase of $127 billion (1% of current GDP) over the next seven years and $450 billion (3.2% of current GDP) per year in the long run from expanded OCS and Alaska development. This would immediately put our economy on a prosperous track, and push growth back to traditional post-World War II levels.”
“Just 5.4% of western federal lands are leased for oil and gas development. This number is not expected to increase anytime soon, as the 2012 numbers show yet another decrease in leasing under the Obama Administration. Decreases in leasing leads to decreases in production, this is evidenced by the fact that oil production on federal lands fell by an average of 275,000 barrels per day in 2011.”
For more information about the Congressional Western Caucus, please visit www.westerncaucus.pearce.house.gov.