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