- The Washington Times - Wednesday, November 9, 2011

ANALYSIS/OPINION:

Dreaming can be a beautiful escape - but when we mistake it for reality, we’re in for a real-life nightmare. This is what is happening today with America’s energy policy, and the American people are suffering as a result. Instead of basing U.S. energy policy on the world as it is, too many elected officials and special-interest groups favor an energy policy based on the world as they would like it to be - a world without fossil fuels.

These dreamers would like to put a giant “do not disturb” sign on the treasure trove of energy buried under our feet and off our nation’s shores. They would rely on power from the sun, wind, waves and farm fields - even though the technology to use these supposed alternative energy sources efficiently and affordably in a competitive market doesn’t exist.

There’s another big problem with this fantasyland energy policy: It requires the elimination of fossil fuels that are proven, abundant, reliable and more affordable than the possible replacement energy sources.

How can this possibly be accomplished? One way to try is to shower billions of dollars in taxpayer subsidies on alternative sources of energy that can’t compete in the free market, as the federal government has done.

Another way is to make fossil fuels more expensive and harder to produce by piling excessive taxes and regulations on the oil and natural gas sector. We see this playing out as the Congressional Joint Select Committee on Deficit Reduction (commonly called the supercommittee) is besieged by demands to impose billions of dollars in discriminatory energy taxes on the oil and natural gas sector.

These tax increases would hurt consumers and employers by raising the costs of driving, manufacturing and transporting products, and operating business. They would wipe out jobs and weaken our economy. They would make it harder for American oil and gas producers and fuel and petrochemical manufacturers to compete with foreign rivals, thereby increasing America’s reliance on foreign oil, fuels and petrochemicals.

Instead of increasing the amount of tax revenue collected, these tax hikes would actually decrease tax collections because they would reduce the amount of fuels, petrochemicals, oil and natural gas produced in the United States.

Yet, almost every day, some elected official or special-interest group demands energy tax hikes to make companies in the oil and gas sector “pay their fair share” of taxes and stop receiving “oil subsidies.”

In fact, these companies already pay far more than their fair share of taxes and earn less income per dollar of sales than many other companies. For example:

c The oil and gas sector pays income taxes, royalties and other fees to all levels of government in the United States totaling nearly $86 million every day - about $31 billion a year.

c Fuel and petrochemical manufacturers and oil and gas producers paid an effective income tax rate of about 41 percent in 2010, compared with 26.5 percent for other U.S. industrial companies.

c The oil and gas sector is the largest private-sector source of revenue to the U.S. Treasury. In 2010, companies in this sector paid more taxes per company than any other industry.

c Companies in the American oil and gas sector earned 5.7 cents per dollar of sales in 2010, compared with an average of 8.5 cents for other American manufacturers.

American oil and gas sector companies don’t receive and aren’t seeking subsidies or special tax breaks. They simply want the same tax treatment that other U.S. companies already receive so they can compete with foreign companies and provide employment to Americans.

The jobs of more than 9 million Americans are supported by companies that produce oil and natural gas and that use these resources to manufacture gasoline, diesel, jet fuel, home heating oil, other fuels and petrochemicals used in thousands of products.

But instead of doing more to strengthen the oil and gas sector so additional jobs and domestic energy can be produced, opponents want to reduce employment in this sector.

These opponents want to destroy existing jobs in the hope that somehow, somewhere, someday some people may be employed by “green” energy companies - even though these new workers would earn far less than workers who would lose their jobs, and even though many new workers would be employed in foreign nations.

Demonizing American manufacturers in the oil and gas sector and canonizing impractical energy sources doesn’t serve the best interest of the American people.

Instead, our government should be encouraging all forms of energy to compete on a level playing field - not a field of dreams - to create jobs, serve consumers, pay taxes and succeed. This is how America became the world’s most prosperous, powerful and productive nation. This is how our nation can climb out of economic tough times and build a new prosperity for Americans today and tomorrow.

Charles T. Drevna is president of the National Petrochemical and Refiners Association.

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