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By Don Briggs
President, Louisiana Oil and Gas Association

President Obama released his budget this week for 2013. With high hopes that the energy sector might receive support, reality says different. The President has clearly stated that he would like to “eliminate unwarranted tax breaks for oil companies, while extending key tax incentives to spur investment in clean energy manufacturing and renewable energy production”. Therefore, he is making good on his plan to “double down” and kill the incentives of the oil and gas industry, while continually promoting green energy and tax cuts for wind and solar power. We are seeing natural gas prices at an all-time low in the United States, while wind and solar power continue to be exponentially more costly per unit to produce. Not only is the production of natural gas more cost efficient than wind and solar, but the oil and gas industry has also created thousands of jobs for a hurting U.S. economy. American Petroleum Institute President Jack Gerard stated, “Frankly, the administration should be trying to replicate the success America’s oil and natural gas industry has had in creating jobs and growing the economy primarily through development on private and state lands. The evidence clearly shows that what we’re doing is working.”

With the vast amount of shale oil and gas available, America has the potential to become less dependent on foreign resources in the coming years. But, we have an administration that is trying to slash investment incentives and in turn, give government dollars to the clean energy sector – wind and solar. The oil and gas industry currently invests its dollars, and then receives credit; The Obama plan would give out hundreds of millions of dollars before the wind and solar companies have invested their first dollar. Again, the Federal Government is cutting investment incentives to the very industry that has created thousands of jobs for the United States.

President Obama also included in his budget $45 million in funding to the U.S. Department of Energy, the Environment Protection Agency (EPA), and the U.S. Geological Survey to further research “reducing the potential health, safety and environmental risks of hydraulic fracturing”. While no government or private organization has any concrete evidence that hydraulic fracturing causes environmental or health-related problems, this $45 million funding is yet another avenue for the Federal Government to take oil and gas regulations from the states’ jurisdiction. Deputy Interior Secretary David Hayes stated, “We have no interest in creating conflict with state regulation.” In direct contradiction to Deputy Secretary Hayes, Interior Secretary Ken Salazar says that due to companies not liking patchwork regulations from state to state, Interior will be creating a template to be used across the country. This countrywide template idea rings of federal regulation and is not acceptable to the oil and gas industry.

The President has attempted to persuade the general public that his intent is to develop and assist America’s energy industry. However, it is clear that his plan diminishes a thriving oil and gas industry and he clearly does not desire to see America become truly energy independent.