US News & World Reports: Time to Close Deficit by Ending Handouts to Big Oil
Drilling in the Arctic National Wildlife Refuge is a shortsighted proposal that would benefit big oil companies and not the American economy. There is an age-old saying: When you are in a hole, stop digging. But as Congress looks for new ideas to reduce our national deficit, there sit the Republicans, shovel in hand, hoping to resuscitate an old idea, drilling in the ANWR.
The Joint Select Committee on Deficit Reduction, or the "supercommittee," has been charged with reducing our deficit by at least $1.5 trillion over the next 10 years. My Republican colleagues on the Natural Resources Committee recently suggested allowing drilling in the pristine ANWR as a means to reducing the national debt. They want to give away the crown jewel of the National Wildlife Refuge System to big oil companies.
In truth, drilling in the Arctic refuge would do very little to reduce our deficit in the next 10 years. According to the Department of Energy, oil production from the Arctic refuge wouldn't even begin for 10 years.
As a result, the Congressional Budget Office has said that drilling in the refuge would generate only $3 billion during the first 10 years from initial lease sales. This is a drop in the bucket of the overall reductions we need.
In contrast, proposals from the Natural Resources Committee's Democrats to ensure oil and mining companies pay their fair share would generate nearly $60 billion over the next 10 years.
While the rest of the nation is swimming in debt, the oil and gas industry is swimming in profits, and reducing its workforce. The top five oil companies have made $71 billion in just the first six months of this year. Yet the Republican majority has opposed a repeal of unnecessary tax breaks for the oil and gas industry that would generate more than $43 billion over the next 10 years.
It is also time to end royalty-free drilling on public lands offshore in the Gulf of Mexico. Closing this loophole could raise $9.5 billion over the next decade. Incentivizing companies to drill on the millions of acres of public land they already hold would generate nearly $1 billion.
In fact, oil companies are just sitting on more oil than we could ever extract from the Arctic refuge. According to the Department of the Interior, there is more oil under the leases that oil companies are not using offshore than there likely is in the Arctic refuge.
Repealing royalty giveaways to the Gulf Coast states would generate an additional $1.9 billion. Increasing inspection fees for the oil industry, as the BP Commission has recommended, would generate another $500 million. Increasing the royalty rates oil companies pay to drill on public land onshore could generate an additional $900 million.
All told, over the next 10 years these Democratic ideas would reduce our deficit nearly 20 times more than opening up the Arctic refuge to drilling. To put that in perspective, if these Democratic ideas were the height of the Empire State Building, the Republican plan to drill in the refuge would occupy only the first five of the building's 102 floors.
We need a plan to begin reducing our deficit in the short term, not shortsighted giveaways of our most pristine natural resources. The Republican plan to open up the ANWR to drilling would not offer us any refuge from red ink on the national ledger sheet. It amounts to little more than an opportunistic giveaway to the oil industry, and is a distraction from real solutions.
By: Rep. Ed Markey
Source: US News & World Reports