Gingrich: Energy Policy Should Rest on Incentives, Not Punishment

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Encouraging Development

• Breaux: Congress Should Not Wait for a Crisis to Act
• Clark: Old Policies Stunting Potential for Innovation
• Gingrich: Energy Policy Should Rest on Incentives, Not Punishment
• Harbert: Private Sector Ready To Do Its Part

Advanced Technologies

• Agassi: Let’s Lead the Green Industrial Revolution
• Brdar: Fuel Cell Energy: Clean, Abundant
• Burns: Clean Energy Is Made in the USA
• Slocum: Beware of Polluters Claiming to Have Converted to Green

The Climate Change Debate

• Riggs and Monsma: Time to Tackle the Big Three Issues, Together
• Odum: It’s Time for a Grand Bargain
• Shapiro: Economy Will Force Quick Action on Climate Change
• Wirth: Moment of Truth Arrives for Action on Climate Change
• Zoi: Change Needed in Policy and Attitude

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A truly sustainable American energy policy is one that dramatically increases domestic energy supplies while lowering energy prices and protecting the environment.

Unfortunately, the momentum in Washington is in the opposite direction.

Instead of making energy cheaper, which would help create jobs and save Americans money, President Barack Obama wants to impose an energy tax on every American.

A Massachusetts Institute of Technology study from 2007 estimated that this type of energy tax could raise costs for a family of four by more than $3,500 by 2015. The Obama administration’s own budget director is on record predicting around a $1,300 increase in the price of energy for the average American from these higher taxes.

As a candidate, Obama himself recognized the pain this would cause every American, saying, “Under my plan ... electricity rates would necessarily skyrocket.”

Raising taxes in the middle of a severe economic recession is a recipe for disaster. Looking back to the beginning of the Great Depression, Herbert Hoover raised taxes in the 1930s and dramatically deepened that crisis. Higher energy taxes are guaranteed to kill jobs and reduce the individual incomes of every single American. If they can, more and more businesses will move their operations overseas or face bankruptcy here at home.

Jimmy Carter experimented with taxing energy, and the result was a debacle: That policy decreased domestic production and increased our reliance on foreign sources of energy. As a result of decreased production, the government’s revenue projections for the tax were four times greater than what was actually collected.

If raising energy taxes in the middle of a recession is not bad enough, Obama’s team also wants to punish existing producers of U.S. energy.

The president’s budget includes a new $5.3 billion excise tax on oil and gas development in the Gulf of Mexico, in addition to a series of tax law changes that will, by 2019, raise the cost to produce energy in America by more than $30 billion.

The end result of higher energy taxes on individual consumer and energy producers won’t just be the raising of energy costs for every American. It will also punish the oil, gas and coal industries in America, making us increasingly reliant on foreign sources of energy for the foreseeable future. In addition, considering the United States has some of the strictest environmental standards in the world, hurting the domestic energy industries actually gives a competitive advantage to suppliers in countries with much laxer environmental standards.

Instead of raising energy taxes and punishing domestic energy production, America should be expanding its own energy supplies and finding ways to lower the cost of energy for every American. This can be accomplished with a smarter policy of incentivizing energy solutions instead of punishing energy use.

Offshore, the United States has an estimated 86 billion barrels of oil and more than 400 trillion cubic feet of natural gas. As we transition to a clean energy economy, we should still utilize the safe drilling techniques off our own coasts rather than relying on foreign dictators for our energy. Penalizing oil companies and taxing expanded drilling drives up the cost of fuel for all Americans, nearly all of whom rely on gasoline for their cars.

We can do this by giving incentives to states to permit energy exploration offshore. Changing federal law to give all states with offshore oil and gas the same 48 percent share of federal royalties as most states get for land-based resources would give cash-strapped coastal states an incentive for responsible development.