The People of America's Oil and Natural Gas Indusry

Oil Spill Shouldn't Cloud Energy Facts

Jane Van Ryan

Jane Van Ryan
Posted June 3, 2010

At a speech at Carnegie Mellon University yesterday, President Obama called the Gulf oil spill a "catastrophe" and pushed for a climate bill and higher taxes on oil companies to pay for "clean energy research and development." Mr. Obama added, "The next generation will not be held hostage to energy sources from the last century. We will not move back. America will move forward."

With all due respect, Mr. President, move forward to what? Let's look at the facts:

  • The climate bill that passed the House of Representatives nearly a year ago was a giant tax bill. According to studies, it could destroy more than 2 million jobs nationwide, even after accounting for the creation of green jobs. One analysis projected it would reduce aggregate gross domestic product (GDP) by $9.4 trillion over the next 25 years, and others projected sharply higher gasoline prices. With the economy trying to recover and the official U.S. unemployment rate standing at 9.9 percent, this isn't the time to raise costs and put jobs in jeopardy.
  • Raising taxes on oil and natural gas companies would reduce the amount of private capital available for investments in both traditional energy resources and fuels for the future. Energy companies are leaders in "green" investments. Between 2000 and 2008, the U.S. oil and natural gas industry invested $58.4 billion in greenhouse gas mitigating technologies in the North American market. That's more than the investments by either the federal government or all other U.S.-based private industries combined.
  • The U.S. Energy Information Administration (EIA) says this nation will need more oil and natural gas in the future, not less. EIA's energy forecast says the United States will need 14 percent more energy between 2008 and 2035, and half of the energy demand will be met by oil and natural gas. Although the market share of non-fossil fuels is growing, oil and natural gas will continue to play a very large role in the nation's energy future.

Frank Verrastro of the Center for Strategic and International Studies and other energy experts say "it will be decades before the United States can transition to a low-carbon or emission-free economy," making it essential to continue producing traditional fuels. The Deepwater Horizon accident shouldn't be used to cloud the facts surrounding U.S. energy needs or unduly influence decisions as important as dealing with the nation's climate challenges.