Despite President Obama’s pledge to cut red tape for job-creating industries, regulations and other delays are holding up billions of dollars in investments and thousands of jobs for oil and gas producers, the head of the American Petroleum Institute tells The Washington Times.
“Why would you take away from the very industry that’s creating hundreds of thousands of jobs?” asked Jack Gerard, president and CEO of the American Petroleum Institute, who accused the White House of not keeping its promise. “Why would you punish one of the … industries that is creating more revenue for the federal government today than perhaps any industry? Why would you penalize them?”
Oil and natural gas companies could create millions more jobs if allowed to drill domestically, Mr. Gerard said, adding that it also would help wean Americans away from oppressive foreign governments and companies responsible for high gas prices. Another plus would be the generation of billions of tax dollars.
Overbearing regulators, however, are keeping that from happening, he said.
“We’re still very troubled by not only the number of regulations, but the extreme nature of them,” Mr. Gerard said. “The president called on his people to review the regulatory processes. But we can point to a number of regulatory processes that have been initiated or continue to go forward that discourage the development of oil and natural gas in this country.”
In one instance, three agencies are reviewing the same process, even though it has been safely used for 65 years, he said. The Environmental Protection Agency — despite its early study that found the practice safe — along with the Interior and Energy departments are investigating the process.
Mr. Gerard said a more streamlined approach in which one regulator reviews processes in a timely manner would help the industry expand.
“Here’s one technology; instead of looking at it from a regulatory standpoint with one group, we have three different entities within the same government that are reviewing the process,” he said. “They’re discouraging production, and they’re creating uncertainty.”
For those who fear domestic drilling poses too many risks, Mr. Gerard counters that the industry is more careful than many people think.
“We take our responsibility seriously,” he said. “Anyone who suggests we’re cavalier just doesn’t understand the industry, and they’re naive.”
Taxes are another big drawback for oil and natural gas companies, Mr. Gerard said. The industry pays an effective tax rate of about 41 percent and contributes $86 million a day to the Treasury Department, but that hasn’t stopped calls for higher taxes to punish the companies.
“So when we hear things like, ‘Let’s go tax the oil industry’ or ‘Let’s go tax the natural gas industry,’ there couldn’t be anything more harmful,” he said.
Regulatory forces also are threatening investment in the Gulf of Mexico for the first time since 1957, Mr. Gerard said.
But if the government opened America to domestic drilling, it would solve the country’s most pressing problems, he argued. The industry, which employs 9.2 million Americans and represents 7.7 percent of the nation’s gross domestic product, could create another 190,000 jobs by 2013. By 2025, it could generate another $194 billion in tax revenue. By 2030, American could produce 92 percent of its liquid fuels in the U.S. and Canada.