Rep. Charles B. Rangel, D-N.Y., recently delivered a striking rebuke of America’s energy industry (Commentary: We Ain’t Broke, Nov. 22, 2013). But his criticism provided a distorted picture of this vitally important sector of the economy.
At a time when the national unemployment rate remains unacceptably high, the energy industry is helping set the stage for a more robust economic recovery as it creates jobs nationwide.
It is equally important to take note of the significant role that the energy industry has had in sustaining the U.S. Treasury, as the government finds itself struggling to get its finances in orders.
My understanding of the energy sector stems from my professional experience in the financial services industry. And as a Harlem resident in Rangel’s district, I feel compelled to point out the tremendous job opportunities that the rapid growth in the energy industry is projected to provide hundreds of thousands of African-American and Latino workers. These are two groups that have been hit particularly hard by the slow economic recovery and that often have an unemployment rate double the national average.
Indeed, a recent study by IHS Global Insight offers a glimpse of the economic promise that American energy production offers to African-American and Latino communities as the energy sector continues to discover innovative ways to engage in oil and gas exploration in an environmentally sound manner.
America’s energy sector has the potential to add 525,000 new jobs by 2020 and 811,000 by 2030, according to the report. And slightly over a third of those new jobs will go to African-American and Latino workers. More than half of these jobs are blue-collar positions, while many others are scientific and management positions. These are the kind of high-paying jobs that enable families to buy homes, invest in the education of their children, put away money for retirement and finally take the journey down the path to create generational wealth.
But rather than cheer the phenomenal growth in this sector, an assortment of critics seek to discredit American energy producers, chiefly by disregarding what many experts know: that this industry shoulders more than its fair share of taxes.
The claim that the oil and gas industry enjoys a special status that results in low tax rates is little more than propaganda advanced by critics with no interest in having a debate grounded in facts.
But here are the facts: The energy industry carries a heavier tax burden than just about any other sector in the economy by both percentage and real dollars.
The New York Times, for example, last year published an analysis showing that between 2007 and 2012 the oil and gas industry paid an average tax rate of more than 37 percent, higher than any industry analyzed. It also identified three energy firms that paid the most taxes: Exxon ($146 billion), Chevron ($85 billion) and ConocoPhillips ($58 billion).
Contrast that with other findings of the Times analysis: It found that other S&P companies paid, on average, a rate of 29 percent. The analysis also identified companies that paid an even lower percentage of earnings in taxes over the past five years, including FedEx (23 percent), Eli Lilly (19 percent), Raytheon (19 percent), Google (17 percent), General Electric (16 percent), Apple (14 percent) and Boeing (7 percent). Near the bottom was Carnival, the cruise ship company, which paid 0.6 percent.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.