Saturday, August 18, 2012
he economic well-being of the United States and the livelihood and safety of our citizens is largely dependent on maintaining a strong energy supply. We depend on electricity to light our homes and businesses, natural gas to heat them, and gasoline to operate the cars and trucks that carry us to work and transport our goods. Because of the vital role of energy in our daily lives, we must continue to develop new sources of energy that are reliable, renewable, affordable and environmentally safe. The Path to Prosperity The Path to Prosperity, the budget resolution that I authored, calls for getting Washington out of the business of picking winners and losers in the economy – and that includes our energy sector. Look no further than the bankruptcy of Solyndra, a company that was once the poster child for the Administration’s “green jobs” initiative, to see an example of the failure of Administration’s economic policies. Having Washington pick winners and losers in the marketplace only further distorts the market, weakens the rule of law, and ultimately, fails to spur sustainable job creation. Rather than helping politically connected firms at the expense of others, Congress should be advancing comprehensive policies that benefit all job creators and entrepreneurs. The best energy policy is one that encourages robust competition and innovation to ensure that the American people have access to an affordable and stable energy supply. This is exactly what the House-passed budget does. The Path to Prosperity eliminates crony capitalism through the tax code, advances pro-growth reforms aimed to boost job creation and lower gas prices. It calls for fundamental, revenue-neutral tax reform that would scale back or eliminate the deductions, loopholes and carve-outs that are distorting the tax code. It seeks to end the current tax discrimination and treat large and small businesses alike. It lowers the corporate rate to 25 percent for all job creators so that U.S. businesses no longer have to labor under the highest corporate tax rate in the world. By broadening the tax base, the federal government would be able to generate the same level of revenue without the discriminatory distortions for special interests that politicians have packed into the current tax code over the years. It rejects calls from the President and his party’s leaders in Congress to raise taxes on energy producers. According to the non-partisan Congressional Research Service, the President’s tax policies would “raise the cost of exploration and production, with the possible result of higher consumer prices and more slowly increasing domestic production.” Independent energy producers and families would bear the brunt of these punitive tax hikes. The Obama administration has blocked and delayed domestic energy production both onshore and offshore, costing jobs and sidelining American energy sources at a time of rising gasoline prices and unstable conflict in the Middle East and North Africa. The House-passed budget calls for a more sensible approach, allowing for more resources from bonus bids, rents, royalties, and fees as a result of unlocking domestic energy supplies in a safe, environmentally responsible manner. A Long Term Solution for Energy Independence I believe a national energy proposal must take a multi-pronged approach focused on increasing American-made energy, reforming outdated fuel regulations, and investing in alternative energy sources. I was happy to help author H.R. 909, A Roadmap for America’s Energy Future. This legislation, introduced by Representative Devin Nunes, promotes an all-of-the-above energy policy that embodies the pillars explained above: it facilitates American-made energy, recognizes the importance of alternative energy, streamlines the outdated regulatory process for clean technologies like nuclear power, and avoids hitting our economy with new taxes and mandates. More Refineries I also support reforms to our regulatory regime to allow for new refineries to be built in the U.S. We have not built any new refineries since 1976. At that time, our country was only using a handful of blends of gasoline. Now, we are attempting to refine four dozen blends of gasoline in a system designed to only produce a few. This has imposed substantial constraints on our ability to refine the gasoline that we use on a daily basis and has forced us to import more and more of the gasoline that we use. Furthermore, adding new refineries to the market will lead to greater competition and help place downward pressure on prices. Boutique Fuels In addition to problems with supply, we pay more for gasoline because of an outdated reformulated gasoline policy that requires different areas of the country to use different blends of fuel to meet environmental requirements. This fragmented system results in the under-production of certain blends and allows refineries to charge more for the unique boutique fuels that they produce due to a lack of competition in the marketplace. The use of boutique fuels also causes price spikes any time that there is a supply disruption, such as a refinery fire or pipeline break, because there are few refineries that can make the special blend to cover the loss in capacity. Furthermore, areas like Southeastern Wisconsin that are required to use different fuels during the winter and summer months experience price spikes when the transition between fuel types is made. Conservation We must also affect the demand side of increasing gasoline prices. I believe that energy conservation and responsible fuel efficiency improvements can go hand in hand with our efforts to expand our economy. I believe that initiatives such as requiring efficiency improvements on vehicles using a class-by-class basis, rather a company-by-company basis, are proposals that can help reduce the demand for gasoline while not undermining U.S. auto manufacturers. It is my hope that Congress will pass legislation that will reduce energy consumption in an efficient manner, protecting our domestic auto industry and ensuring lower energy prices for consumers. Domestic Production America has an abundance of domestic resources – including natural gas and oil in the Outer Continental Self, Alaska, oil shale in the Central West, and a variety of alternative sources. A top priority of the 112th Congress must be to unleash the potential of domestic production of American–made energy in an environmentally-conscious manner. We can do this while simultaneously improving infrastructure and creating jobs by allowing the use of royalties paid by energy companies to repair roads and bridges. At a fundamental level, the cause of expensive gasoline is an imbalance between supply and demand. Our society continues to demand more gasoline, but we have not increased the domestic supply of crude oil or finished gasoline. Increasing supply at home will not only help lower fuel prices and create good paying jobs, but it will reduce our reliance on foreign oil from hostile nations such as Iran and Venezuela. To this point, House Republicans are committed to advancing proposals to increase American–made energy. A variety of bills have passed the House and are awaiting further action in the Senate including: H.R. 2021 – the Jobs and Energy Permitting Act H.R. 1938 – the North American- Made Energy Security Act H.R. 910 – the Energy Tax Prevention Act Keystone XL Pipeline Decision Last July, the House passed H.R. 1938, the North American-Made Energy Security Act, which directed the President to issue a final order granting or denying the permit for the Keystone XL pipeline. The pipeline would connect the tar oil sands in Alberta, Canada to the US Gulf Coast. Estimates indicate that this could enhance early energy capacity to oil refineries in the Midwest and Gulf Coast by 700,000 barrels per day. Despite passing the House with bipartisan support and estimates that the project will create tens of thousands high-quality, good-paying construction jobs in addition to several thousand more “spin off” jobs, the Democrat-controlled Senate never took up the bill, and on November 10, 2011, the Obama Administration announced that no decision would be made on the long-sought pipeline until 2013, conveniently after the next Presidential election. As part of the Temporary Payroll Tax Cut Continuation Act, which was agreed to in December 2011, President Obama is required to issue a permit for the Keystone XL pipeline within 60 days – by February 2012 – unless he determines that the pipeline would not serve the national interest. Should President Obama decide that this is the case, he is required to submit to Congress a report detailing his justification for this decision. On January 18, 2012, President Obama rejected the Keystone XL pipeline saying: “This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people.” There was nothing arbitrary in the deadline given to the President. This project has been in the works for several years, and I am disappointed that the President decided this job creating proposal was not in the nation’s best interest. I look forward to working with Members of Congress to find ways to move forward on this proposal which will not only lessen our dependence on Middle Eastern oil but also create thousands of American jobs.