Promoting a Pro-Growth Energy Policy
The Path to Prosperity’s major proposals to end crony politics, promote safe, responsible exploration and bring down energy costs:
Gets Washington out of the business of picking winners and losers in the economy, including our energy sector.
Encourages robust competition and innovation to ensure that the American people have access to an affordable and stable supply of energy.
Promotes new energy exploration to discover unknown energy resources, generate millions of new high-paying jobs and fund needed infrastructure initiatives.
Q: Does the budget include special-interest tax breaks for oil companies?
A: No. This is absolutely false. In fact, The Path to Prosperity calls for the opposite. Our budget calls for ending the crony politics in energy that have resulted in higher gas prices, wasted taxpayer dollars, and debacles such as the Solyndra bankruptcy. While some of the most visible abuses of taxpayer dollars have occurred in the Department of Energy’s loan-guarantee programs for alternative-energy companies such as Solyndra, our budget aims to roll back corporate welfare spending that crowds out private investment in the energy sector across the board, including subsidies for oil and gas companies that don’t need them. The Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund is one example of a subsidy that our budget proposes to end.
As for special treatment for energy companies through the tax code, our budget calls for fundamental business-tax reform that would spur job creation and economic opportunity. It would scale back or eliminate the deductions, loopholes and carve-outs that are distorting the tax code. First, by eliminating loopholes, it would put all U.S. businesses on the same level playing field with each other. Then, by lowering rates, it would help U.S. businesses compete against their foreign rivals.
It rejects calls from the President and his party’s leaders in Congress to raise taxes by ending only those deductions used by producers of domestic oil and gas while leaving scores of credits and loopholes for their preferred energy alternatives untouched. According to a March 2012 study by the Congressional Budget Office (CBO), provisions to benefit energy efficiency and renewable energy accounted for 78 percent of the budgetary cost of federal energy-related tax preferences in 2011.
Q: What does this budget do to bring down the price of gas?
A: The Obama administration has blocked and delayed domestic energy production both onshore and offshore, costing jobs and sidelining American energy sources at a time of rising gasoline prices and unstable conflict in the Middle East and North Africa. Also, according to the non-partisan Congressional Research Service (CRS), the President’s tax policies would “raise the cost of exploration and production, with the possible result of higher consumer prices and more slowly increasing domestic production.” Independent energy producers and families would bear the brunt of these punitive tax hikes.
According to the Congressional Research Service (CRS), the United States has more combined recoverable oil, coal, and natural gas than any other country, including Russia, Saudi Arabia and China. Our country has 163 billion barrels of recoverable oil and enough natural gas to meet the country’s demand for 90 years. Natural gas and oil production currently takes place on less than 1 percent of federal lands with energy-resource potential.
The House-passed budget calls for opening new areas to allow expanded exploration on federal lands. In addition to lowering energy costs, this approach would allow for more revenues to the government from bonus bids, rents, royalties, and fees as a result of unlocking domestic energy supplies in a safe, environmentally responsible manner.