Demonizing Big Oil is a bad idea
STEVE HUNTLEY email@example.com June 2, 2011 6:34PM
Updated: July 8, 2011 2:48PM
With fill ’er up meaning empty your wallet, home prices sliding, job creation and manufacturing remaining weak, and politicians of all stripes calling for a policy for energy security, Democrats have declared war on . . . America’s big oil companies.
Iranian President Mahmoud Ahmadinejad, Saudi King Abdullah and Venezuelan boss Hugo Chavez must be rolling in the aisles in laughter. They are the world’s real oil robber barons — the Organization of Petroleum Exporting Countries and Russia account for more than 80 percent of the world’s oil reserves.
The Democrats are right that we can’t drill our way to energy security. But American oil and gas must be part of the answer, and demonizing America’s big oil companies and singling them out for special tax penalties is not helpful to building a national consensus on energy policy.
The latest bit of political grandstanding came at a recent Senate hearing where executives of the five top U.S. oil companies were called on the carpet for high gas prices and big profits — while the politicians overlooked the big taxes Big Oil pays. Democratic senators called, as has President Barack Obama, for ending “$4 billion in taxpayer subsidies” for the oil giants.
The executives responded reasonably that Congress should end tax breaks for all companies rather than singling out oil. But corporate tax reform with lower rates and no tax breaks would deprive politicians of the power to try to pick winners in the economy and to punish businesses they don’t like, such as the domestic oil industry.
The most revealing exchange came when Sen. John D. Rockefeller IV (D-W. Va.) the great-grandson of the founder of Standard Oil Company, a predecessor of Exxon Mobil, called oil executives “deeply and profoundly out of touch, and deeply and profoundly committed to sharing nothing.” Chevron Chief Executive John Watson took that one and hit it out of the park: “I don’t think the American people want shared sacrifice. I think they want shared prosperity.”
It’s Democrats who are out of touch. In being reflexively anti-business, they are anti-prosperity. Their hostility to expanding exploitation of U.S. fossil fuel resources deprives American workers of jobs at a time they need them most and robs the country of one path toward prosperity at a time when American families desperately want a growing economy.
The perversity of the Democrats’ position was underscored in March when Obama traveled to Brazil to encourage its offshore oil production so America could be Brazil’s customer, even as his administration blocked new U.S. offshore drilling. He has since had to retreat from his drilling ban.
“We’ve got to get a coherent energy policy that emphasizes production at home, alternative fuels, energy efficiency,” declared White House Chief Economist Austan Goolsbee last month. OK, what’s stopping you? Obama’s presidency is in its third year. Instead of focusing on energy and jobs, the White House unleashed a tsunami of red ink in ineffective “stimulus” spending, imposed byzantine regulation on business and muscled through a partisan health-care law placing new burdens on job creators.
Goolsbee might take a look at Australia. It is exploiting its mineral resources such as coal to feed China and other growing Asian economies. The mining boom has inspired predictions of Australia’s unemployment dropping to 4.5 percent and a budget surplus in 2013.
America is not resource poor. Sure, some of its resources are hard to get to, but not impossible. For instance, new technology could open oil shale fields from Texas to Ohio that, by one account, have the potential to increase U.S. petroleum production by 25 percent in 10 years and create 2 million jobs.
Yes, we need to develop alternative energy. But the White House also should be committed to creating oil jobs, and not just in Brazil.