February 15 2013
Energy Matters for the Economy
It’s no secret the economy is struggling to grow, and the President should know that the availability of affordable energy is key to innovation, manufacturing, and growth. In his State of the Union Address, President Obama bragged: “Today, no area holds more promise than our investments in American energy. After years of talking about it, we’re finally poised to control our own energy future. We produce more oil at home than we have in 15 years.”
The President is taking credit for an achievement to which he is not entitled. As I mentioned in a previous post, the Obama Administration is NOT the reason why gas production is at a 15 year high. As Thomas Pyle with the Institute for Energy Research (IER) explains, 96 percent of that increase in oil production has taken place on private, not federal lands. According to Pyle, “Currently, it takes more than 300 days to get a permit to drill for oil or gas on federal lands, compared with 10 days in North Dakota where an energy boom has led to the lowest unemployment in the country.” Federal leasing has the potential to give the economy an extra boost; it would spur job creation in both the energy industry and industries that rely heavily on oil, like manufacturing and transportation.
IER recently released a study that outlines the economic potential of leasing federal lands. According to the study, “expanding access to resources found on Federal lands and waters” has a lot of potential:
• GDP would increase by $127 billion annually for the next seven years, and $450 billion annually for the next thirty years.
• The cumulative 37-year increase in GDP would be $14.4 trillion.
• 552,000 jobs would be created over the next seven years, with almost 2 million jobs annually for the next thirty years.
• Job gains would be felt in high-wage, high-skill employment like health care, education, professional fields, and the arts.
• $32 billion in annual wage increases over the next seven years, with a cumulative $3.7 trillion increase over the a 37 year cycle.
• The federal government stands to receive $2.7 trillion more in tax revenues over the next 37 years, while state and local tax revenues equal $1.1 trillion in the same time period.
To read the report, click here.