The high profile rejection of the Keystone XL Pipeline by the White House left 20,000 jobs unrealized, but this slight to the unemployed and underemployed pales in comparison to the economic effect that the President’s desired energy tax increases will have on American consumers. Punitive tax increases on the production of oil and gas may well fund the President’s favorite left-wing programs in the short term, yet the long term loss in jobs and tax revenue would strike a serious blow to the fragile economy.
An economic analysis performed by LSU professor Dr. Joseph Mason clearly shows that increasing taxes on domestic oil and gas companies would give a leg up to foreign firms, while eliminating 155,000 U.S. jobs and slashing $68 billion from national wages. This transfer of wealth abroad would result in a net loss of $53.5 billion in federal revenue, which demonstrates that the Administration’s desired cash grab is more about currying favor with anti-oil activists during the 2012 election cycle than it is about balancing the budget.
If President Obama is serious about turning the tables on record unemployment rates, he should utilize the energy industry to create jobs, not continue to demonize one of the few sectors that continues to create good-paying jobs. Between shovel ready projects like Keystone XL, the vast offshore resources on our coasts and in the Gulf, and the 175 year supply of natural gas under North American soil, we have an amazing opportunity. Developing these resources will not only create jobs, but help reduce the debt and increase our energy security. Indeed, increasing domestic production will limit foreign control over the U.S. oil supply — an increasingly important goal considering the recent instability due to Iran’s threat to close the Strait of Hormuz.
Experts agree that oil and gas will drive the U.S. economy for the next several decades. Doubtlessly, President Obama’s campaign is facing significant pressure from environmentalists to put up a strong front against oil and gas production, but lawmakers must remain in touch with reality. Projects like Keystone XL will bring needed jobs to the economy. Higher energy taxes will send needed jobs out of the country.
The energy sector has continued to create jobs during the recession. In fact 1/5 of all private sector jobs created from 2003 to 2010 were in the oil and gas industry. Stifling this vital economic engine through higher taxes to fund more failed political experiments like Solyndra is unwise and reckless. U.S. jobs are on the line.
 As Robert Samuelson recently noted, “There’s some dispute over the magnitude. Project sponsor TransCanada claims 20,000, split between construction (13,000) and manufacturing (7,000) of everything from pumps to control equipment. Apparently, this refers to “job years,” meaning one job for one year. If so, the actual number of jobs would be about half that spread over two years. Whatever the figure, it’s in the thousands and thus important in a country hungering for work. And Keystone XL is precisely the sort of infrastructure project that Obama claims to favor.”