(The Center Square) – Seven Democratic U.S. representatives have asked Speaker of the House Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-New York, to not target the oil and gas industry in the budget reconciliation bill before Congress.
Despite the concerns they and those in the industry have raised, Democrats in the U.S. House Natural Resources Committee pushed through a section of the bill, which includes billions of dollars in taxes, fines and fees on the oil and gas industry in the name of climate change.
Committee Chair Raúl M. Grijalva, D-Ariz., said the section of the bill that passed “invested in millions of American jobs” and put the U.S. “on a more stable long-term economic and environmental path.”
The Democrats, from predominantly oil- and gas-dependent districts in Texas, are facing tough re-election campaigns next year: Henry Cuellar, Vicente Gonzalez, Lizzie Fletcher, Sylvia Garcia, Marc Veasey, Filemon Vela, and Colin Allred.
In a newsletter to constituents, Gonzalez, whose district stretches from Seguin to McAllen, said he urged Democratic leadership to reconsider provisions targeting energy jobs in the Build Back Better Act “that unfairly target oil and gas jobs.”
“While I agree that we should support the growth of green jobs, and invest in our workforce and healthcare system, we must not do it in a way that hurts Texas jobs and Texan families,” he said.
Cueller, whose district also stretches to the southern border and has also called on the Biden administration to halt its open border policies, argues that Biden’s energy plans will cost thousands of jobs and only increase costs, hurting Texans and other American, in the process.
The Texas House Democrats argue the “language in the House budget reconciliation package specifically targeting the U.S. oil, natural gas, and refining industries … have the potential to cost thousands of jobs, stifle economic recovery, increase energy costs for all Americans, strengthen our adversaries, and ultimately impede the transition to a lower carbon future.”
The proposed tax changes in the bill will further cut domestic production and endanger domestic refining capacity while increasing demand for oil from OPEC+ countries, they added.
The price of crude oil is the largest factor in gasoline prices, and Biden’s policies, they warn, will increase costs for crude oil production, and thereby the costs of all products reliant on crude oil, for consumers.
The budget reconciliation bill should not “unduly disadvantage any industry and oppose the targeting of U.S. oil natural gas and refining with increased taxes and fees and the exclusion of natural gas production from clean energy initiatives,” they add.
In February, Cuellar, Fletcher, Gonzalez, and Veasey called on Biden to rescind his Jan. 27 order halting the issuance of new leases for oil and gas production on federal lands and offshore waters.
The order, they argued, would negatively impact the economy, make the U.S. dependent on other countries for oil and “hurt an already suffering community.”
They didn’t get a response.
All of the clean energy jobs the Biden plan refers to – wind, solar and carbon capture – rely on oil and gas for production. None can be produced without using oil.
The Texas Oil and Gas Association points out that while oil prices plummeted to historic lows and the West Texas Index fell below zero for the first time in history last year, the need for products made from oil and natural gas skyrocketed.
“Nearly every in-demand product we need to be safe, to save lives and to power our economy – from face shields and hand sanitizers to high-speed internet connections and computers – is made possible by oil and natural gas,” TXOGA President Todd Staples said in a statement.
Under the Trump administration, the U.S. became the world’s top producer of oil and maintained its position as the top global producer of natural gas. In 2019, the U.S. became a net exporter of petroleum (crude oil and refined) products, with Texas leading the way, for the first time since 1949. The U.S. is still in its fifth consecutive year as the top net exporter of natural gas in the world.
Despite being hit hard by the state’s shutdown and an oil war between Russia and Saudi Arabia early last year, the Texas oil and gas industry helped contribute to a budget surplus when the state was facing a deficit. The industry paid $13.9 billion in taxes and state royalties in fiscal 2020, funding more than $2 billion to school districts and $688 million to Texas counties.