Striking Oil

Taxing the oil industry and refusing access to important U.S. shale reserves would drive up both the Federal government’s debt and the U.S. unemployment rate, according to Kyle Isakower of the American Petroleum Institute.

With EPA regulations on petroleum bound for discussion in Congress within the next two years, API has hopped on the campaign trail with an information crusade, Isakower admitted at the Tuesday bloggers’ briefing sponsored by The Heritage Foundation. Isakower said that increased government revenue – which public officials are always looking for – would come only through expanding access to petroleum.

Isakower said that should the government allow for expansion, federal revenue could increase by $150 billion in the next 11 years.

He emphasized that international oil is not the key to American success, and that a large number of untapped, natural shale sites in the U.S. would provide up to four million barrels of oil per day. In turn, the high cost of gas would cease for consumers.

By allowing access to sites such as the Marcellus Shale in Pennsylvania, Mr. Isakower stated that thousands of domestic jobs would be created in the region, which is one of several U.S. shale sites. He pointed out how North Dakota was one of the few states that reported growth in jobs and revenue during the economic recession, mainly because of their access and extraction of oil.

Isakower laims that fear that America is running out of oil are unfounded, citing a study that indicated oil consumption, at its current rate, has the capacity to withstand another Century of use.

Leaving the petroleum regulations alone, which is to say ‘tax free’, is the right thing to do for the industry, the government and the consumers, Isakower argued. Taxing the industry would yield initial revenue, albeit small, but would eventually end up costing the government money to keep up with.

As it stands, 7.5 percent of the GDP is tied to the oil and gas industry, a substantial amount from one resource. This would decline significantly, and eventually completely, if the petroleum industry were taxed.

Also debated was the idea of using alternative energy, which many see as inexpensive and widely available for commercial use. Although alternative energy may seem ready for mass acceptance in America, Isakower warned otherwise, saying it’s not ready today, and won’t be ready for full use for a couple of decades. In other words, until technology to develop energy resources is perfected, using API’s strategy would be the most fiscally responsible option.

Near the end of the forum, questions of the petroleum industry’s safety and regulation disaster from April’s Deep Water Horizon explosion were discussed at length, but Mr. Isakower insisted it was a one-time event. Although Isakower did not offer trend lines to prove that point, his questioners did not give any rebut to it.

Richard Thornburgh is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.