On Tuesday, President Obama released the final budget of his presidency. As a parting shot, he includes a new tax on the middle class that adds about 24 cents to the price of every gallon of gasoline. This will be bad for consumers, bad for jobs, bad for America’s economy and bad for our national security.
The tax hike comes in the form of a $10 “fee” per barrel of oil. The money is earmarked for new spending on green transportation projects. This is just the latest sign that the Obama administration is eager to continue its assault on American energy production.
Today the OPEC cartel is producing oil at a pace designed to drive U.S. shale oil producers out of business. The best response would be to make it easier and cheaper for American producers to operate and compete.
President Obama’s proposed tax increase on every barrel of oil produced in America puts us at a competitive disadvantage to Russia and Iran.
The Obama administration recently lifted economic sanctions allowing Iran to start exporting oil again. They have a lot of it ready to go. The U.S. Energy Information Administration estimates that the Iranians have 30 million to 50 million barrels of oil sitting offshore in tankers. They have additional crude oil stored in onshore facilities.
Iran also has the world’s second-largest reserves of natural gas. They are building a liquefied natural gas export plant that is about 40% complete. It could start shipping LNG to Europe in as little as two years. Iranian officials have already begun lining up contracts across the European Union.
Like Iran, Russia is actively opportunistic. Remember that President Vladimir Putin invaded Ukraine largely to get control of natural gas facilities there. Russia’s state gas company, Gazprom, appears prepared to start a price war with the U.S. to maintain its tight grip on Europe’s natural gas market.
Russia has the capacity to flood Europe immediately with natural gas to undercut prices there. That would help them build their market share and deter the construction of U.S. LNG projects. The Obama administration has a documented history of delaying permits to American producers who want to export LNG to our allies.
Energy is the master resource, and we are locked in a global competition for energy markets. This struggle has a direct effect on our national security. This is not the time to add costs to American energy production – or to shut it down altogether. Doing so will only help our adversaries and make us and our allies more dependent on them.
While campaigning in New Hampshire last week, Hillary Clinton was caught on tape promising a supporter that the end of fossil fuel development on public lands is “a done deal.”
Her bravado is dangerously naïve. Forty-one percent of America’s coal production comes from public lands. So does 22% of our crude oil and 16% of our natural gas. Last year, energy producers working on public lands paid more than $9 billion in rent, fees and royalties.
The people who want to keep fossil fuels in the ground have no practical answer for where America would get the power we need. The gap between reliable energy and renewable energy is vast. It will be decades before solar, wind and other renewable technologies can bridge the gap – if they ever can.
President Obama knows that his middle class tax increase won’t pass Congress. Even Democrats are running away from his plan.
Foreign competitors recognize the enormous strategic advantage of becoming the world’s supplier of cheap energy. The energy plans outlined by President Obama and Secretary Clinton weaken America’s economy and threaten our global power.
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