Guest Op-ed: En­ergy tax pol­icy key to fu­el­ing job cre­ation

North Penn Life - - Opinion - By Jon D. Fox

Imag­ine how quickly our world would un­ravel if the goods we use or peo­ple we de­pend upon were un­able to travel across our great coun­try when we needed them. How des­per­ate would we be­come if, within our cities, busi­nesses and homes, we found our­selves strug­gling to af­ford light, heat and en­ergy to run our ap­pli­ances, tools and elec­tron­ics.

Ac­cus­tomed as we are to Ln­sWDnW JUDWL­fiFDWLRn, PRsW RI us do not wish to imag­ine so cum­ber­some an ex­is­tence, un­able to af­ford trans­porta­tion and heat­ing fu­els or to ad­dress the de­mands of an in­creas­ingly frag­ile in­fra­struc­ture. Nev­er­the­less, we must pay at­ten­tion to sub­tle shifts in global eco­nom­ics, as well as in do­mes­tic pol­icy, that have the po­ten­tial to put us on the road to a darker place.

Ex­plod­ing pop­u­la­tions and grow­ing economies in coun­tries such as China and In­dia are greatly in­creas­ing en­ergy con­sump­tion. As these emerg­ing eco­nomic pow­ers eagerly seek new en­ergy sup­plies, OPEC is more than will­ing to ac­com­mo­date them.

At the same time, the po­lit­i­cal cli­mate in the Mid­dle East has been noth­ing short of chaotic in re­cent years. This volatile com­bi­na­tion — high mar­ket de­mand and a cli­mate of in­se­cu­rity — is em­i­nently ca­pa­ble of driv­ing prices through the roof. There is one small sav­ing grace for the r.S.: Euro­pean eco­nomic con­trac­tions are help­ing to keep global sup­ply greater than global de­mand. Cer­tainly, de­pend­ing on eco­nomic in­sta­bil­ity within the Euro­pean rnion so that we may be well-stocked with af­ford­able OPEC oil is a strat­egy doomed to fail­ure.

So what, you may ask, is the do­mes­tic threat? The an­swer, my friends, is blow­ing in the tax winds. Let’s ex­am­ine the state of en­ergy pol­icy in the r.S.

6RPH SROLFyPDNHUs, fix­ated on in­creas­ing taxes on en­ergy com­pa­nies, aim to re­move sev­eral mea­sures that were put in place to stim­u­late en­ergy-sec­tor job growth. These pro­vi­sions play a ma­jor role in help­ing r.S. com­pa­nies com­pete wLWh IRUHLJn HnHUJy fiUPs, many of which are state owned and hail from nations hos­tile to r.S. in­ter­ests.

Two tax pro­vi­sions are spe­cially tar­geted, the re­moval of which will have a hugely detri­men­tal im­pact on do­mes­tic en­ergy. They are known as “dual ca­pac­ity rules” and “Sec­tion 199” of the tax code.

Dual ca­pac­ity rules grant do­mes­tic tax cred­its to r.S. oil and gas com­pa­nies oper­at­ing abroad. These cred­its were de­signed to off­set any for­eign taxes these com- pa­nies have al­ready paid. Elim­i­nat­ing them would mean do­mes­tic oil and gas com­pa­nies will face dou­ble tax­a­tion and a crip­pling com­pet­i­tive dis­ad­van­tage.

Sec­tion 199 is a tax de­duc­tion avail­able to many com­pa­nies in the man­u­fac­tur­ing sec­tor. It was in­tended to cre­ate jobs. Some in Congress want to sin­gle out en­ergy com­pa­nies by tak­ing away their el­i­gi­bil­ity for this de­duc­tion.

What are they think­ing? Oil and gas com­pa­nies are ma­jor job creators. Do­ing this would put thou­sands of jobs at risk and se­ri­ously in­hibit de­vel­op­ment of new ones.

Ac­cord­ing to a r.S. Bureau of La­bor Sta­tis­tics study pub­lished in the Wall Street Jour­nal, “The Non-Green Jobs Boom,” oil and nat­u­ral gas jobs have led the charge in em­ploy­ment growth over the past decade, thanks to pri­vate sec­tor in­vest­ment and new tech­nolo­gies. Since 2003, oil and nat­u­ral gas pro­duc­tion jobs have in­creased by 80 per­cent.

What’s more, long-term pre­dic­tions for job growth in WhH RLO DnG JDs (DnG UHODWHG) in­dus­tries look just as promis­ing. A re­cent study by CITI group es­ti­mates 3.6 mil­lion new jobs will be cre­ated by 2020. Yet, it seems some in Wash­ing­ton want to see this rosy pic­ture painted black.

Pun­ish­ing pro­duc­tive en­ergy com­pa­nies by need­less- ly tin­ker­ing with an al­ready re­lent­lessly com­pli­cated tax code makes no sense. Why would r.S. pol­i­cy­mak­ers want to dampen Amer­ica’s en­ergy po­ten­tial?

The in­cred­i­ble prom­ise of shale oil and gas has — or should have — quelled un­cer­tainty over the fu­ture of our do­mes­tic en­ergy sup­ply. Enor­mous, for­merly in­ac­ces­si­ble r.S. nat­u­ral gas and oil re­sources are now flRwLnJ, WhDnNs WR nHw DnG im­proved ex­trac­tion tech­niques that will en­sure the safety of our wa­ter sup­ply. The rnited States and the Western Hemi­sphere are well po­si­tioned to be­come HnHUJy sHOI-suI­fiFLHnW Ln WhH com­ing decades. Al­ready, the rnited States is the No. 1 pro­ducer of nat­u­ral gas in the world, thanks to our vast re­sources.

Many global is­sues are out­side our con­trol, but a sound do­mes­tic en­ergy pol­icy is well within our reach. To re­duce en­ergy price volatil­ity and en­cour­age the growth al­ready in­sti­gated by our r.S. en­ergy com­pa­nies, our lead­ers and our tax poli­cies should work in fa­vor of this valu­able sec­tor. Wash­ing­ton must fo­cus its at­ten­tion on sup­port­ing long-term sta­bil­ity in the en­ergy mar­ket — not on work­ing against it.

Jon D. Fox is a for­mer Repub­li­can con­gress­man from Penn­syl­va­nia’s 13th Con­gres­sional Dis­trict.

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