The right way to spend on in­fra­struc­ture

Giv­ing per­mits to bricks and mor­tar projects is a start

The Washington Times Daily - - COMMENTARY - By Stephen Moore

Back in early 2015 oil and gas com­pany Conoco-Phillips re­quested a per­mit from the Obama ad­min­is­tra­tion to launch an oil drilling project in Alaska. The en­ergy project, called the Greater Moose’s Tooth De­vel­op­ment, is lo­cated within the National Petroleum Re­serve and would cre­ate thou­sands of jobs in an eco­nom­i­cally de­pressed area of the state. The project has the full ap­proval of the lo­cal com­mu­nity, and poses lit­tle threat to the en­vi­ron­ment in a sparsely pop­u­lated re­gion.

It is a multi-bil­lion dol­lar jobs and in­fra­struc­ture project with roads and hous­ing and pipe­lines. It won’t cost the fed­eral tax­pay­ers a penny to build. In

fact the roy­al­ties from the project will likely raise hun­dreds of mil­lions of tax dol­lars for the fed­eral govern­ment and the state.

A no-brainer, right? Not ex­actly. For years the Obama ad­min­is­tra­tion has tan­gled up the project in reg­u­la­tory red tape. “We are ready to break ground on day one af­ter we get the per­mit,” a frus­trated Con­noco-Phillips vice pres­i­dent John Dab­bar tells me. “We’re go­ing to em­ploy nearly ev­ery­one up there,” he adds. It still hasn’t been ap­proved be­cause Pres­i­dent Obama hates fos­sil fu­els.

If Don­ald Trump is smart, he will green-light the drilling project the day he en­ters of­fice.

Now mul­ti­ply this story by sev­eral hun­dred at least. The rad­i­cal green agenda of the Obama regime has for eight years can­celed, de­layed, de­nounced and dis­rupted these types of smart en­ergy, min­eral and trans­porta­tion projects all over the coun­try. The value of these fi­nan­cially lu­cra­tive and job-cre­at­ing ini­tia­tives — such as the Key­stone XL pipe­line — is in the hun­dreds of bil­lions of dol­lars.

Think about that in con­nec­tion with Don­ald Trump’s prom­ise of as much as $1 tril­lion for new in­fra­struc­ture spend­ing. I am al­ways asked, where will the money come from to pay for these projects given that the govern­ment is al­ready run­ning near tril­lion dol­lar an­nual deficits?

We’ve all been look­ing at this the wrong way. Smart in­fra­struc­ture in­vest­ment in Amer­ica doesn’t re­quire one penny of new fed­eral spend­ing. In fact these projects can sub­stan­tially re­duce govern­ment bor­row­ing and in­crease rev­enue in­flows.

All Pres­i­dent-elect Trump must do to unleash the mighty spend­ing of pri­vate, for-profit en­ter­prise is to give the com­pa­nies and the lo­cal­i­ties the green light to build, to drill, to mine, to in­vest.

A new study by the Com­mit­tee to Unleash Pros­per­ity, by Jack­son Cole­man, a for­mer In­te­rior De­part­ment en­ergy ex­pert, finds that the value of en­ergy re­sources on fed­eral lands could ex­ceed $50 tril­lion. The fed­eral leas­ing rev­enues and in­come tax re­ceipts from de­vel­op­ing these re­sources could reach $3 tril­lion.

The Obama ad­min­is­tra­tion has held up at least five trans-national pipe­lines that could cre­ate tens of thou­sands of high pay­ing union jobs.

In the moun­tain states like Mon­tana, Idaho and Wy­oming, dozens of ma­jor min­ing projects for ur­gently-needed rare min­er­als have been bot­tled up by the fed­eral reg­u­la­tors. Ap­par­ently, Mr. Obama would rather im­port these re­sources from China.

Then there are coal plants nec­es­sary to se­cure our elec­tric power sup­ply. Amer­ica des­per­ately needs to build clean coal fire plants to en­sure re­li­able elec­tric­ity to our homes and busi­nesses. Mr. Obama has shut them down while bankrupt­ing the in­dus­try. We also need re­finer­ies and LNG ter­mi­nals to al­low Amer­ica to ex­port more of our abun­dant shale oil and gas. Since we have the clean­est oil, gas, and coal in the world, de­vel­op­ing U.S. En­ergy is pos­i­tive for the gloabl en­vi­ron­ment and re­duc­ing green­house gases.

There is one key dis­tinc­tion be­tween pri­vate and pub­lic in­fra­struc­ture spend­ing. For-profit projects by def­i­ni­tion must have a pos­i­tive re­turn on in­vest­ment. Pub­lic in­fra­struc­ture projects of­ten have neg­a­tive re­turns be­cause they gen­er­ate so lit­tle rev­enue. Think of the $70 bil­lion bul­let train in Cal­i­for­nia that will carry very few pas­sen­gers. Would any pri­vate com­pany in its right mind ever build this rolling white ele­phant? Or think about the Bridge to Nowhere in Alaska or the Obama “in­vest­ments” in green en­ergy projects that have gone belly up.

Sure we need road and bridge and air­port im­prove­ments. But that isn’t what is hold­ing back growth.

For seven years now the econ­omy has se­verely un­der­per­formed be­cause busi­ness cap­i­tal in­vest­ment — in fac­to­ries, equip­ment, com­put­ers, trac­tors, ware­houses, and lab­o­ra­to­ries — has dried up. That’s the real in­fra­struc­ture cri­sis in Amer­ica. Mr. Trump can fix that cap­i­tal in­fra­struc­ture deficit by sim­ply giv­ing per­mits to the myr­iad bricks and mor­tar projects, like the Greater Moose’s Tooth De­vel­op­ment. In other words we can solve the in­fra­struc­ture prob­lem and lower the bud­get deficit at the same time.

ILLUSTRATION BY GREG GROESCH

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