Energy industry: encouragement, not punishment
February 4, 2011 Marita K. Noon

And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s."

Who could oppose this? As President Obama stated, the oil companies are "doing just fine." Of course, the speechwriters’ intent was to create a shift in public opinion—bad them, good us. The problem is that the statement (and, really, the whole speech) shows a lack of understanding of how business works and exemplifies his anti-business attitude. The well-delivered speech was widely heralded as a success—even by detractors. And, it was a success if the goal was to ignore the message voters sent to Washington in November and mislead the public.

First, America is rapidly heading toward bankruptcy. The voting public knows this. The Federal government is too big. When 40 percent of every tax dollar goes toward paying off debt, it is time to stop spending, err, "investment," and cut.

Which brings us to the second point: We do not like all that government "owns"—car manufacturers, Fannie and Freddie, student loans. The list could go on and on—especially if we do not put a halt to their buying binge. (Remember when Congressman Maxine Waters threatened to "nationalize" the oil companies?) Every penny the government spends comes from the American public, the taxpayers.

Okay. He did identify one other potential source for underwriting his feel-good "investments." As mentioned earlier, he plans to quit "giving" taxpayer dollars to the oil companies. Here, again, is misinformation. We do not know what the forthcoming budget will look like, but based on past history and the statement in the State of the Union (SOTU) address, we can assume that he will continue to try to push through last year’s punitive policies regarding American energy.

1) Dual Taxation

Oil and gas companies are already one of the single largest taxpayers in the country—not counting all the jobs that spin off of their business like restaurants and construction. They are an important part of our economy. The dual taxation proposal would have the international companies pay income tax in the country where they drill and in the US. Companies not based here, do not have to pay taxes twice on the same money—nor does any other industry doing business overseas. This puts American companies at a disadvantage at a time when we are in an economic war. Does that sound like we are "giving" to the oil and gas companies? It sounds more like "taking" to me.

2) Section 199 job creation

Back in 2004 a job-creation tax incentive was put into place to encourage all industries to hire. It is not a gift, but an incentive. This plan is still in place across the board. However, based on the budget hints given at the SOTU, Obama plans, as he tried to do last year, to remove this benefit from one industry: oil and gas. This is a politically motivated proposal and is not in America’s best interest. The administration has selected its winners and losers. Clearly, "green" energy is a winner—oil and gas is not. Eighty percent green energy by 2035 is not likely. But even if it is, we’ll need oil and gas for decades. Let’s encourage American energy exploration and development—which would have the additional benefit of being less susceptible to unrest in other parts of the world.

While we may think the oil and gas companies are "doing just fine," this statement and the above proposals fail to take into account the impact on all Americans—especially the poor. Energy affects everything. It is not just the price of gasoline at the pump. As we are already seeing, when energy costs go up, so does everything else—every product we buy, every service we use.

Instead of helping, our elected officials are silent while President Obama announced his intent to increase the policy-induced poverty.

Washington does listen when we, the people, shout loud enough. If you are concerned about the size of government and the out-of-control spending, you need to make a lot of noise so they do not forget you are watching. Contact your Senators and tell them business needs encouragement, not punishment!


Marita Noon is the Executive Director at Energy Makes America Great Inc. the advocacy arm of the Citizens’ Alliance for Responsible Energy—working to educate the public and influence policy makers regarding energy, its role in freedom and the American way of life. Find out more at


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