West Virginia Record

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THEIR VIEW: Obama blind to virtues of oil, gas companies

Their View

By The West Virginia Record | Oct 16, 2012


GALLATIN, Tenn. -- President Barack Obama was recently on the campaign trail in Colorado, where he touted wind energy and once again renewed his call to impose billions of dollars in new taxes on American oil and gas companies.

In the city of Pueblo, the president said that "it is time to stop spending billions in taxpayer subsidies on an oil industry that's already making a lot of profit, and let's keep investing in a clean energy industry that has never been more promising."

Now put yourself in the position of the owner of a small trucking firm, trying to grow a business in the face of surging diesel fuel prices. You're wondering one thing: How will you compete in the marketplace when the White House is imposing policies that are counterproductive to growth and job creation?

And these questions are being raised not just in trucking and transportation. Higher energy prices will ripple through the entire economy, affecting every aspect of our lives.

While the White House is touting the questionable benefits of wind energy, it seems blind to the realities of the oil and gas industry's contribution to the stability and growth of this nation and its role in fueling, literally, a real and lasting economic recovery.

Contrary to what we're hearing from the Obama administration, the U.S. oil and gas industry doesn't receive subsidies. It makes use of federal tax deductions that are generally available to manufacturers and other U.S. businesses. A deduction made available under the federal tax code is not a subsidy.

The American energy industry shoulders more in taxes today than any other industry. As the Wall Street Journal noted in a March editorial, the oil and gas industry pays an effective tax rate of more than 41 percent, compared to an average of 26.5 percent for the S&P Industrial Index.

What's more, the oil and gas industry is leading our economy when it comes to capital invested domestically. A recent report from the Washington-based Progressive Policy Institute singled out the oil and gas industry on its list of "investment heroes," with more than $36 billion invested domestically in 2011. While the president is misleadingly casting oil and gas industry profits as immoral or excessive, none of these new investments would be taking place if oil and gas companies were losing money.

And since when has "profit" become a dirty word in our country? The failure rate of small startup trucking companies is staggering — a mere 15 percent will make it to the second year of operation. The entrepreneurs who risk everything to start these businesses, invest and create jobs know how essential profits are to their own businesses — and our national prosperity.

Yet the high tax rates that American energy companies pay, and the billions in investments they commit to our economy, make no impression on the White House. It has not been deterred from its misguided pursuit of a "green" economy after embarrassing boondoggles like Solyndra, the Fremont, Calif.-based maker of solar panels that received $535 million in guaranteed federal loans before going bankrupt.

We need a return to realistic thinking on energy policy and measures that create economic growth and jobs. And we have little time to lose.

Owen is president of the Tennessee-based National Association of Small Trucking Companies.

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