Washington Times: Energy jobs can fuel economic growth

January 5, 2011 by

After January’s swearing-in ceremonies, Congress will confront hostile Washington weather and equally treacherous political battles – ongoing wars, a struggling economy, immigration debates and energy and environmental issues.

U.S. Capitol

This all seems familiar to people who have worked in government or industry or who closely observe the political scene. But can the newly elected officials avoid the same mistakes and find long-term solutions to these recurrent problems?

Energy and environmental issues remain highly contentious. Former House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid drove deleterious measures such as the “cap-and-trade” bills. In theory, such schemes may have provided a workable emissions regulatory regime, but it was buried in political garbage and giveaways guaranteed to bring job losses and damage our economy.

The election results, shifts in party balance and new committee leadership (Rep. Fred Upton replacing Rep. Henry A. Waxman as chairman of the Energy and Commerce Committee for one) augur that the 112thCongress will exercise more regulatory restraint and economic and technological concern than the 111th. We can look for efforts to craft policies that encourage the clean use of all fuels to spur U.S. job growth.

Another case in point is EPA‘s greenhouse-gas regulations, scheduled to take effect next month. The new rules would have the same impact on jobs and the economy as cap-and-trade. We can hope moderate Democrats such as Sen. John D. Rockefeller IV will work in the new Congress to undo the damage before it takes effect.

Natural gas also will be spotlighted for qualities that appeal across party lines. It offers major new tax revenue for federal, state and local coffers. As a clean-burning fuel, it can reduce greenhouse-gas emissions. And because hydraulic fracturing has enabled extraction of “tight gas” from resources across the country, from New York’s Marcellus Shale to the Barnett Shale in Texas, these huge new gas reserves provide promise for economic growth.

Of course, taxes will continue to be a hot topic as the White House continues to target billions of dollars of energy incentives. The new Republicans in the House and Senate, while certainly friendlier to traditional energy sources, are also more sensitive to deficit spending. They are likely to insist on “pay-fors” to compensate for continuing or new incentives.

The administration continues to call for an end to “dual capacity” (protection against double taxation for U.S.-based firms that compete in the global market) as well as elimination of the Section 199 manufacturing deduction – but only for major U.S. international oil companies. No matter who holds House or Senate committee chairmanships, anti-business and anti-oil officials will continue to urge that these “loopholes” be closed, even though repeal would make U.S. companies less competitive, increase the costs of U.S. oil and gas production and hurt the economy.

Continued here.

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