Energy Production = Deficit Reduction
Nicolas Loris /
Today, the House Natural Resources Committee released its list of recommendations to the deficit reduction super committee. Their recommendations would go a long way to increase revenue for the federal government without raising taxes.
A Kodiak Gas & Oil Corp crew pulled drilling pipe from the ground on unit rig 328 near Watford City, North Dakota.
The recommendations include increasing energy exploration and production both onshore and offshore, which would increase economic activity and generate revenue but also increase the money coming into the government through more royalties, lease sales, and rent fees. The committee also calls for increasing access to natural resources on federal lands and selling or transferring land away from the federal government and into private hands.
An aggressive, pro-supply energy policy that opened access in all of America’s territorial waters would increase energy supply and create jobs and could generate more than $36 billion in government revenue as soon as 2015 and more than $800 billion by 2030.
North Dakota is the poster child of what can happen when we unleash free enterprise and allow states to develop and commercialize their resources. North Dakota is drilling at record pace with production doubling in from 2008 to 2010. According to the North Dakota Petroleum Council:
From 2005-09, the level of employment directly related to oil and gas activity grew from 5,051 full-time equivalent positions to 18,328 positions. Secondary employment was estimated at 46,800 positions in 2009.
Oil production has only increased in North Dakota, and 87 percent of North Dakotans have a favorable view of the oil industry’s impact on the state. Many states are pushing to be like North Dakota, but inability to access reserves or slowed permitting processes have crippled their ability to do so. Overall production in the western United States and offshore in the Gulf of Mexico has slowed significantly as a result of a stalled permitting process.
Another obvious area to expand production is in the Arctic National Wildlife Refuge, where an estimated 10.4 billion barrels of oil lie beneath a few thousand acres that can be accessed with minimal environmental impact. The House committee calls for more energy access but also reducing the federal roadblocks that prevent access to many of America’s resources, including other minerals, water, and timber:
In addition to energy production, federal revenues can also be boosted through careful, safe and more active management of our timber and mineral resources on federal lands. Over-regulations blocks access to our resources and is harming our economic competitiveness. The federal government should pursue policies that create and promote a balanced, multi-use approach to our public lands.
Part of that strategy should be to sell some of the federal assets to the private sector. Reducing excessive federal land ownership would reduce costs but would also improve the environmental well being of many of the areas, since the government has accumulated a tremendous maintenance backlog. The National Parks Service’s backlog exceeds several billion dollars and is rising despite increased trajectory in annual appropriations. As Heritage wrote in its Saving the American Dream deficit reduction plan, “Sales of assets would immediately reduce the government’s operating deficit and debt, reducing future interest costs.”
This land (and water) is our land (and water), and reining in the federal government’s control of America’s natural resources would provide a huge boost to our economy and make a significant dent in our growing national debt.