On Thursday, March 4, 2009, the House Natural Resources Energy and Minerals Subcommittee will hold an oversight hearing on the President's Fiscal Year 2011 budget requests. The Administration’s budget establishes a dangerous national energy policy that will increase energy costs for American families and businesses, hinder American energy production and send American jobs overseas. Taken together, this budget is a recipe for economic decline and continued dependence on foreign energy sources.
The President’s budget includes nearly $40 billion in direct tax and fee increases on the American oil, natural gas and coal industries.
These taxes and fees put at risk over 9 million American jobs that are supported by the U.S. oil and gas industry.
The budget includes a hidden cap-and-trade national energy tax, which CBO estimates would increase taxes by $870 billion.
According to the Obama Administration, national energy tax legislation could cost each American household $1,761 a year.
The President’s budget anticipates that that revenue from new Outer Continental Shelf (OCS) leasing will decline from $1.5 billion in 2009 to only $413 million in 2015. The only way revenue would decline is if less of the OCS is offered for leasing for energy production. This proves that the Obama Administration has no intention of opening up new areas for offshore drilling.
When the President and Congress lifted the ban on offshore drilling, they made 500 million more acres available for drilling. Unfortunately, the Obama Administration has reinstituted a defacto moratorium on offshore energy production by delaying the development of a new five-year OCS plan.
According to a study by American Energy Alliance, expanding drilling in the OCS would generate $54.7 billion in federal tax revenue that could be used to pay down the $7.78 trillion public debt.
The fist offshore lease sale in Virginia was scheduled to take place in 2011. Despite bipartisan objections, the Administration has delayed this lease sale – denying the State and federal government of much needed revenue.
According to a study by NARUC, employment in energy intensive industries will decrease by 13 million jobs if the U.S. maintains its current moratorium on offshore and onshore energy production.
The President’s budget eliminates the profitable royalty in-kind (RIK) program for collecting oil and gas royalties, even though the program generated over $106 million in benefits for the American taxpayer in 2008. As a result of the elimination, the MMS will require an additional $10 million in FY2011 to maintain the same level of auditing.