Oil & Gas: The Gifts That Keep On Giving
Politicians in Washington seem to have their own special list of who’s been naughty and who’s been nice.
Naughty are oil and natural gas companies, which have come under heavy fire by the Obama Administration. The lump of coal that policymakers have in mind is tax increases.
Nice are the two politically correct renewables, solar and wind. They draw generous praise from green-minded politicians and lavish taxpayer subsidies.
But as the Solyndra bankruptcy shows, renewables have seriously failed to live up to the hype. “Green” tech companies have taken in hundreds of millions in taxpayer support — and generated little in the way of jobs, sustainable economic activity, or consumer benefits.
Meanwhile, America’s oil and natural gas industry continues to make an outsized contribution to our economy. It’s time to check that list a second time.
1. What’s so naughty about creating jobs?
The oil and natural gas industry supports approximately 9 million American jobs. Major new projects can create steady employment for entire communities. The Barnett shale, for instance, supports 100,000 jobs in northern Texas alone. Natural gas production in the Marcellus contributes double that to the Pennsylvania economy.
And job growth in oil and gas has a profound multiplier effect in other industries from manufacturing to transportation to accounting. In fact, one analysis from PricewaterhouseCoopers found that each oil and gas job indirectly supports three other positions in the rest of the economy.
The Labor Department estimates that total American oil and gas jobs jumped by half in the past decade, making this industry one of the few to keep adding positions despite the recession.
2. What’s so naughty about investing in America?
In 2010 — the most recent year of complete data — the oil and natural gas industry accounted for almost a half trillion dollars in benefits to the American economy. This estimate is comprised of $266 billion in new capital spending, $176 billion in paid wages, and $35 billion in stock dividends.
3. What’s so naughty about generating tax revenue?
Taxes paid in the United States by many of the biggest oil and natural gas companies actually exceed their domestic earnings. For example, over the past five years, ExxonMobil has paid three times more in U.S taxes ($60 billion) than its U.S. earnings ($19 billion).
State and municipal governments across the country are staring down massive budget shortfalls. The federal government has racked up $14 trillion in debt. Strong tax generation from oil and gas firms provides some much-need relief on the public balance sheet.
4. What’s so naughty about improving returns on retirement investments?
When oil and gas stocks thrive, the benefits aren’t confined to a cadre of industry elites. Nearly 50 percent of industry shares are held in public and private retirement plans. Individual investors own another 20 percent.
As a result, when this industry grows, the retirement savings for millions of average Americans get stronger. After the devastation wrought on 401(k)s and IRAs during the recession, this boost has been vital.
5. What’s so naughty about plentiful energy?
Remember the 1970s when Americans had to wait in long lines to buy rationed fuel. People worried about having enough heating oil for their homes through the cold of winter. In some parts of the world, gasoline is still a luxury.
But here in America, energy is easily accessible at competitive market prices. That’s thanks to the ability of the oil and gas sector to find, develop, produce and market a product that remains vitally important in American life. This holiday season, give thanks where thanks is due. And may pro-consumer and pro-taxpayer energy policies bless 2012.