How to Reverse Our Economic Malaise

There's one thing the Obama administration could do, according to Jack Gerard, the head of the American Petroleum Industry, that would almost overnight create hundreds of thousands of jobs, help close the deficit, and make us independent of foreign sources of energy, but Mr. Obama won't do it.

Despite his pledge to cut red tape for job-creating industries, regulations and other delays are holding up billions of dollars in investments and thousands of jobs for oil and gas producers, Mr. Gerard alleges. Why Mr. Obama won't do it certainly is a mystery, at least to people like Mr. Gerard:

“Why would you take away from the very industry that’s creating hundreds of thousands of jobs?” “Why would you punish one of the … industries that is creating more revenue for the federal government today than perhaps any industry? Why would you penalize them?”

Oil and natural gas companies could create millions more jobs if allowed to drill domestically, Mr. Gerard said, adding that it also would help wean Americans away from oppressive foreign governments and companies responsible for high gas prices. Another plus would be the generation of billions of tax dollars.

Overbearing regulators, however, are keeping that from happening, he said.

“We’re still very troubled by not only the number of regulations, but the extreme nature of them,” Mr. Gerard said. “The president called on his people to review the regulatory processes. But we can point to a number of regulatory processes that have been initiated or continue to go forward that discourage the development of oil and natural gas in this country.”

In one instance, three agencies are reviewing the same process, even though it has been safely used for 65 years, he said. The Environmental Protection Agency — despite its early study that found the practice safe — along with the Interior and Energy departments are investigating the process.

Mr. Gerard emphasizes that domestic drilling is extremely safe but that regulations and taxes discourage oil companies from pursuing it:

The industry pays an effective tax rate of about 41 percent and contributes $86 million a day to the Treasury Department, but that hasn’t stopped calls for higher taxes to punish the companies.

[I]f the government opened America to domestic drilling, it would solve the country’s most pressing problems, he argued. The industry, which employs 9.2 million Americans and represents 7.7 percent of the nation’s gross domestic product, could create another 190,000 jobs by 2013. By 2025, it could generate another $194 billion in tax revenue. By 2030, American could produce 92 percent of its liquid fuels in the U.S. and Canada.

The Commerce Department reported Tuesday that the U.S. trade deficit is the largest since the height of the recession in October 2008, and it blamed oil imports for the problem. Mr. Gerard said the potential exists to produce another 5 million barrels a day in the U.S. and Canada.

“If we produce more at home, we import less,” he said. “We can really produce the oil and natural gas the country needs for many, many years to come.”

The solution to so many of our problems is right at hand for the president. Unleashing our petroleum industry would put us on the road to economic recovery and restore us to a position of world prominence. As long as Mr. Obama refuses to support domestic oil and gas production nothing he says about his desire to reverse joblessness and get the economy humming again sounds sincere. He has a lot to answer for to the millions of unemployed when putting many of them back to work would be so easy.