Instead of embracing a potential 1.4 million jobs by expanding energy production and refining, the President proposed a $41 billion tax increase on the industry; a move which could cost 155,000 American jobs and $53.5 billion in government revenue. But these tax increases are not the only area where job growth opportunities aren’t being capitalized on.
The Keystone XL Pipeline, a project to link Canadian oil sands to U.S. refineries, has been on hold for three years while the U.S. State Department produced an environmental impact statement (EIS). The final EIS released by Sec. Hillary Clinton’s department earlier this year concluded that the project posed no significant environmental threat, so Keystone XL should be moving forward, right? Wrong. It is now facing further delays from a flurry of environmental activism, and approximately zero of the 20,000 immediate construction jobs the pipeline promises to create have been realized.
Activists oppose the development of Canadian crude oil, but fail to realize that development will go forward with or without approval of the pipeline. If the Administration does not move on the project, the energy resources and jobs will instead be shipped to China, a quickly emerging economic powerhouse rivaling the U.S. in the global economy.
The $7 billion privately funded project to build a pipeline from Alberta to several of the nation’s 148 oil refineries would generate billions in government revenue. This capital could then be reinvested in the country without raising taxes.
Conversely, the President’s jobs plan would use $140 billion on infrastructure updates by increasing taxes. While the nation certainly needs infrastructure updates, squeezing U.S. businesses of the dollars they could use to grow and hire, in an attempt to create stimulus jobs that offer nothing back to the economy, is a shortsighted strategy and business as usual in Washington, D.C.
Unfortunately, the rest of the country is suffering from a high unemployment rate and things are far from usual. Instead of pursuing costly and ultimately futile government temporary jobs programs the Administration should get out of the way and allow projects which create real jobs and capital, like Keystone XL to go forward. Over 15,000 U.S. companies are active in oil and gas exploration, supporting the employment of more than 9 million Americans. Administration support for this industry and job creating projects like Keystone will increase the demand for U.S. workers, reduce unemployment, and gain the President credibility as a job creator going into the 2012 election. On the other hand, tax increases and delays will only increase the demand for political spin to account for more losses in the jobs market.