Today, the House of Representatives will consider a bill backed by the Democratic leadership to increase taxes on the domestic energy industry. This legislation will raise the cost of gas for every American, send good-paying manufacturing jobs overseas, and increase our dependence on foreign fuel. Every American who cares about our energy security should oppose this wrongheaded bill.
There are two tax provisions in the Democratic legislation. The first would increase the amortization period for efforts to find new domestic oil and gas resources from five years to seven for larger energy producers. This tax increase will be passed along to the consumer in the form of higher prices for gasoline and home heating.
The second provision would remove the oil and gas industry from eligibility for a program designed to boost American manufacturing. This is absurd. The oil and gas industry employs 1.8 million Americans. The average pay is $19.34 an hour for oil and gas extraction, and $28.41 an hour for refineries, plus there are usually generous benefits.
These are precisely the sort of high-paying (often union) manufacturing jobs which Democrats routinely fret that America is losing. In the past, Speaker Nancy Pelosi has said that, “manufacturing jobs are the engines that run the economy,” and complained that, “the American manufacturing sector is in crisis.” Yet this legislation will force those jobs overseas. Further, these jobs are concentrated in the area of country hardest hit by Hurricanes Katrina and Rita, and good-paying energy-industry jobs are a key to recovery on the Gulf Coast.
Both of these provisions would discourage new exploration for domestic energy resources — which we need in order to end our dependence on foreign oil — and weaken our domestic energy industry at a time when doing just the opposite should be a priority.
According to the Energy Information Administration (EIA), total U.S. demand for liquid fuels and other petroleum products is projected to grow from 20.7 million barrels per day in 2005 to 26.9 million barrels per day in 2030 — a 30-percent increase. Our domestic production is already woefully unequal to our energy needs. In 2005, America produced only 5.2 million barrels of oil per day. That number is expected to fall to 4.6 million barrels per day by 2030, as demand rises. Even without Democrats’ efforts to sabotage our domestic energy, we are expected to continue importing two-thirds of the oil we need for the foreseeable future.
We also face a severe shortage of refinery capacity. In 2005, when gas prices spiked in the wake of Hurricanes Katrina and Rita, the problem was not a shortage of oil itself. It was a shortage of refined products like gasoline. We have not built a new refinery in the United States since 1976, and the ones we have are clustered on the Gulf Coast. With the refining industry running at 96 percent capacity when the storms hit, we had no way to produce the gasoline and other petroleum products our economy needs. The Democrats’ legislation will make this problem more acute. By making the American energy industry — including refineries — less competitive, they will force more companies to operate overseas, further reducing our domestic capacity.
Whatever oil and gasoline we do not produce ourselves must be imported, often from nations that are hostile to the United States and our interests. We need to become less dependent on resources from places like the Middle East and Venezuela — and the Democratic proposal will only make the problem worse.
The damage this legislation will do to our domestic energy industry will send ripples throughout our economy. Rising fuel costs hurt virtually every American business, including retailers, restaurants, airlines, and farms. Fighting against tax increases is at the heart of our shared Republican philosophy. No one who cares about energy security should support the Democrats’ legislation to raise gas prices at the pump, ship-manufacturing jobs overseas, and make America more dependent on foreign oil.
— Congressman James McCrery is a Republican congressman from Louisiana and ranking memeber of the House Ways and Means Committee.





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