The Middle East is imploding, oil is close to $100 a barrel, and President Barack Obama wants to raise taxes on domestic oil and gas producers. Such taxes would, if approved by Congress, make the country more dependent, not less, on imported oil.
In the 2012 budget he sent Congress earlier this month, Obama proposed to raise $3.6 billion in 2012 and $46 billion over the next decade from tax increases on oil and gas, more than on any other industry.
The ostensible rationale is, as Obama put it, that “we are eliminating subsidies to fossil fuels and instead making a significant investment in clean energy technology — boosting our investment in this high-growth field by a third — because the country that leads in clean energy will lead in the global economy.”
No mention, of course, of the distortion of investments to support Obama’s goals “of the United States becoming the first country to have one million electric vehicles on the road by 2015 and for us to reach a point by 2035 where 80 percent of our electricity will come from clean energy sources.”
If America is to reduce use of imported fuels, it needs to raise domestic production as well as to conserve. This increases our long-term energy security, rather than harming it. Every single additional barrel of oil produced in America is one barrel fewer that we need to import — and as we produce more at home, we employ American workers and produce revenues for all Americans.
Energy production in the Gulf of Mexico is still stalled due to the BP oil spill last April. Last week Judge Martin Feldman gave the Obama Interior Department 30 days to act on drilling applications in the Gulf, writing in his decision that “not acting at all is not a lawful option.”
Obama’s new tax proposals, rather than leading toward energy independence, would drive oil and gas production abroad at a time when foreign markets are in disarray.
New taxes would make oil and gas in the United States noncompetitive, punishing domestic American oil and gas companies and benefiting countries with large reserves such as Venezuela, Saudi Arabia, Iran and Russia. Does Obama really want these countries, all under fire for their neglect of basic human rights, to get richer at our expense?
Until America has the technology to operate its 250 million motor vehicles without gasoline and natural gas, we need more domestic exploration, not less. Today, with the civil war in Libya, we are already facing a repeat of $4 and $5 gasoline and sky-high home heating bills.
Although Congress is spending billions of dollars on alternative fuels, Obama wants to deny access to development of our own oil and gas resources in some of the most geologically promising areas available, and to increase the tax and regulatory costs of developing these resources.
Americans will become greater conservationists, prodded by guilt or higher prices. But, even so, we will still need oil and natural gas for driving, home heating and electricity generation.
If Obama is serious about moving toward energy independence, he could start by encouraging oil and gas production at home, rather than purchases from unstable dictators abroad.
Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.