Since President Joe Biden took office, energy prices have increased. Between its proposal to ban all new oil and gas development on federal lands and the new punitive energy tax measures enshrined in the reconciliation bill, our country’s energy security and environmental objectives are threatened.
In September, crude oil prices exceeded $ 80 for the first time in eight years, and prices at the pump continue to climb across the country. Sadly, many predict that our situation will get worse before things get better, especially as the winter months approach. It is a global energy crisis that should make our leaders reflect on policies of acceleration to promote low carbon energy.
As the Wall Street Journal recently put it, âThe situation has exposed the fragility of global supplies as countries turn to fossil fuels towards cleaner energy sourcesâ¦â If this crisis articulates one thing, is that the demand for energy is not going one way. So, can we really afford policies such as new fees and new limits on access to domestic resources that will have an even greater impact on energy availability and costs?
For starters, the reconciliation bill includes a methane provision that will levy new taxes and royalties on oil and gas companies – which would undoubtedly lead to higher energy costs for all Americans. Although a levy is difficult to implement and expensive, a better approach would be to control methane emissions through cost-effective and measurable industrial action. The proposed methane charges are so blatant that nineteen state attorneys general recently wrote to Senate leaders expressing concerns about the provision. They were particularly concerned that âby limiting the tax to the oil and gas sector, this current bill invites mission drift. Farms, landfills and coal mines also produce methane.
When it comes to oil and gas development on federal lands, the laws of fundamental economics dictate that when the supply of something becomes scarce, the prices will naturally rise. By removing federal lands from the equation, President Biden will effectively cut off access to a resource that accounts for 22% of total national oil production in the United States. In doing so, we will create an artificial scarcity that will force us to depend more on foreign countries like Russia and other antagonistic countries to provide our energy supplies. Mr Biden has already had to turn around to ask OPEC members to increase their oil production to make up for our losses. They ultimately refused to increase production, pushing our prices even higher.
Offshore oil and gas development in the Gulf of Mexico, which accounts for 15 percent of all US oil production, would be particularly affected by restrictive federal policies. Over $ 223 million in revenue and 200,000 jobs could be lost as a result of this policy.
My home state of Florida has, for the most part, been immune to these economic losses. Yet that is only because we have completely missed out on these economic gains from energy development. For many years, all oil and gas development off the coast of Sun State has been prohibited. And while our economy has enjoyed a solid recovery from the effects of the COVID-19 pandemic, the state could be 230,000 jobs stronger and $ 18 billion richer per year if the moratorium is lifted.
The ancillary benefits of energy development on federal lands should also be considered. Over $ 1 billion has been spent on conservation programs in Florida by the Home Office’s Land and Water Conservation Fund. In fact, the Home Office has announced that the distribution of energy revenues to the four oil and gas producing states off the Gulf, including Alabama, Louisiana, Mississippi, and Texas, is amounted to nearly $ 249 million in 2020. These funds come primarily from the federal government’s overseas rental revenues. land and water for oil and gas development. Yet while some argue that offshore energy development could affect Florida’s tourism industry, it is the money from those same activities that helps preserve and protect the outdoor and recreation economy of the United States. State.
The solution is for Mr. Biden and the Democrats in Congress to abandon policies that limit federal leasing and remove punitive energy tax and policy measures from the reconciliation bill.
These types of policies will only prevent America from quickly regaining a healthy energy and economic base as we try to navigate this global energy crisis.
Policies that encompass our country’s energy resources and support all of the above approaches to energy security are essential for communities across the country. A balanced approach that takes into account our energy needs and protects our environment is possible, and this is something we should all strive for.
â¢ Mike Hill previously served in the Florida House of Representatives and was a member of the Agriculture and Natural Resources subcommittee for the Credit Committee.