WASHINGTON D.C. — The Institute for Energy Research released today a groundbreaking study that assesses the recent Congressional Budget Office analysis of revenues gained by opening federal lands and waters for oil and gas development. The study, conducted by Dr. Joseph Mason, a professor at the Louisiana State University and the University of Pennsylvania’s Wharton School, offers contrasting projections of the potential revenue impacts, job creation, and overall GDP growth that energy resource development on federal lands would provide.
“As the United States looks for ways to generate much-needed revenue to fill trillion-dollar budget deficits, many Washington lawmakers are calling for punitive energy taxes that would result in fewer jobs and diminished private sector investment. This approach is both wrongheaded and counterproductive. Before adopting this course, policy makers deserve to know the staggering economic potential lying dormant under our feet and off our shores because of restrictive federal policies on our vast domestic energy resources,” IER President Thomas Pyle said upon release of the study.
“America is no longer asking whether we have the energy to fuel our economy, or where we will get it. Today, we know where the energy is, and we have the technological capability and the private capital to develop it. What we lack, however, are the policies from Washington that could reverse course, unleash the private sector to produce the domestic energy we need, and get America on the road to a real recovery with good-paying jobs.”
The study’s findings demonstrate that opening federal land that is currently closed-off because of statutory or administrative action would lead to broad-based, lasting economic stimulus.
“This economic impulse could help break the U.S. economy out of its sluggish post-recession malaise without any increase in direct government spending,” Professor Mason notes in the study’s introduction.
“As Congress again turns its attention to the means through which our ongoing budget crises — from the debt limit to budget sequesters to the simple act of funding our government beyond the current budget resolution — there will be no doubt renewed efforts to address revenue concerns by punitively taxing the oil and gas industry in pursuit of modest revenue gains. As this analysis notes, though, the revenue potential inherent to expanding access to resources found on Federal lands and waters is orders of magnitude greater than that which is measured by the Congressional Budget Office.”
Among the studies key findings:
- 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 full report, click here.