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Taxpayer's Tab Issue #8

February 29, 2012

 

Vol. 3 Issue 8 February 28, 2012

 

Legislative Spotlight: Domestic Energy

This week, the National Taxpayers Union Foundation (NTUF) looks at three related bills that focus on expanding domestic energy. The sponsors intend their legislation to bring America closer to energy independence and to create quality jobs through increased energy output. More importantly, they see their proposals as a step toward lower energy costs for Americans by opening up new areas for oil and natural gas drilling. Though each one focuses on a different geographic area, the bills serve as three (of many) bills introduced in the 112th Congress with their merits and economic impacts available to taxpayers.

In addition to increasing the domestic supply of energy, the bills could also help reduce the deficit. Each bill allows for companies to pay the government three types of compensation for the right to extract oil and natural gas from public lands: bidding fees allow companies to obtain leases on federal lands, rental payments maintain a company's right to work on the land, and royalties reimburse the government for the resources that companies take from public lands. Since all of the funds collected are the result of “businesslike or market-oriented transactions,” the Congressional Budget Office (CBO) counts all of these as offsetting receipts, or income that counts as negative spending, instead of revenues.

Alaskan Energy

The Bill: H.R. 3407, Alaskan Energy for American Jobs Act

Annualized Savings: -$300 million (-$1.5 billion over five years)

Number of Cosponsors: 3 Congressmen

Area of Impact: At least 50,000 acres through 8 leases over 6 years

The Arctic National Wildlife Refuge (ANWR) is a large area of land in northern Alaska originally set aside for conservation. Congressman Doc Hastings (R-WA) has introduced H.R. 3407 because geologists have estimated that ANWR contains a considerable amount of petroleum reserves. The measure would require Department of the Interior (DOI) to offer leases in ANWR for the purposes of extracting oil and natural gas. Alaska would receive half of the proceeds generated from the leasing program.

Excluding the royalties for Alaska, CBO estimates the bill would result in $2.5 billion in offsetting receipts over the first nine years of enactment.

To learn more or discuss this bill visit WashingtonWatch.com.


Outer Continental Shelf Drilling

The Bill: H.R. 3410, Energy Security and Transportation Jobs Act

Annualized Savings: -$102 million (-$508 million over five years)

Number of Cosponsors: 10 Congressmen

Area of Impact: At least 50 percent of the Outer Continental Shelf through numerous leases over 6 years

The Outer Continental Shelf (OCS) includes the Atlantic and Pacific coasts as well as the Gulf of Mexico and the coast of Alaska. Congressman Steve Stivers (R-OH) proposes auctioning leases for a majority of the OCS to companies who wish to drill and otherwise extract oil and natural gas from the seabed. The bill allows states to maintain their sovereignty over the state-controlled portions of their shores, however, the federal government maintains control of waters and any activities beyond 12 nautical miles. States would receive royalty money in increasing amounts, starting at 12.5 percent and reaching 37.5 percent after 2022.

CBO has determined H.R. 3410 would save taxpayers $508 million over five years. The savings are wholly a result of royalty offsetting receipts.

To learn more or discuss this bill visit WashingtonWatch.com.


Shale Oil

The Bill: H.R. 3408, Protecting Investment in Oil Shale the Next Generation of Environmental, Energy, and Resource Security (PIONEERS) Act

Annualized Savings: -$5 million (fifth-year savings)

Number of Cosponsors: None

Area of Impact: At least 25,000 acres through 15 leases made over 5 years

Oil Shale is a fine-grained rock that contains petroleum compounds. When heated, the rocks release an oily substance that can be refined into synthetic crude oil. The process is currently more costly than conventional crude oil collection and may have a larger environmental impact.

Congressman Doug Lamborn (R-CO) has proposed H.R. 3408 to research and develop oil shale as a viable domestic energy source. The bill would instruct the DOI to offer leases to commercially develop oil shale sources on federals lands in Colorado, Wyoming, and Utah. Those states would receive half of the royalties applicable to their state.

According to CBO, a majority of the bill would not result in new spending or savings for taxpayers. The oil shale industry is still developing and so the leases would not result in significant offsetting receipts for the government for the first five years, totaling $5 million in FY 2016. The PIONEERS Act was included into H.R. 3410, the Energy Security and Transportation Act, examined above.

To learn more or discuss this bill visit WashingtonWatch.com.



 

 

We Want You!

NTUF is looking for spring and summer associate policy analysts to participate in our internship program. Associates assist with BillTally research and other policy projects. Academic credit is possible. Email questions to ntuf@ntu.org. To apply visit our internship page. Join us and help keep a tab on Congress!



Missed an Issue?

Read them online

Issue 7 - Feb 15
FY 2013 Budget Proposal Analysis

Issue 6 - Feb 8
Investing for Tomorrow’s Schools Act

Issue 5 - Feb 2
Fiscal Responsibility and Retirement Security Act

Issue 4 - Jan 26
State of the Union Analysis


 

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About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

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This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve.

 

 



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