Westerners Paying The Price

Now that it’s September, Members of Congress have begun reappearing in Washington as they wrap up their summer ‘work periods.’ But its unlikely Americans heard anything but the ordinary scripted rhetoric this summer. Majority Leader Eric Cantor told us back in June, “It’s time to get serious about energy, lower costs, create jobs, and unleash America’s full potential.” Too bad Westerners didn’t get to offer their input. In fact, most Americans no longer even see their Representatives when they’re home.

Westerners are growing tired of the same old vocabulary from Washington: when Congress relies on talking points crafted by energy industry lobbyists, Western values don’t have a seat at the table. This phenomenon is nowhere more obvious than in the current budget debate – where the need to continue giving handouts to oil and gas companies making record profits is so urgent, that trimming them responsibly isn’t even being discussed.

No wonder Congressional approval numbers are hovering at the lowest rate in history. Congressional representatives charged with righting our nation’s crippling fiscal imbalance are themselves paralyzed by the outsized influence of the energy industry and their high paid lobbyists. As a result, the Western values of common sense and compromise don’t see the light of day in this important debate.

The argument is simple. Since 1913, taxpayers have funded substantial subsidies to the oil and gas industry and because of low royalty rates on federal lands, Americans are shortchanged every day as our natural resources are given away at cents on the dollar.  Yet each year the oil and gas industry rakes in record profits. As domestic crude oil output increases to the highest level since 1989, it’s time to question why taxpayers should continue funding a highly profitable industry when workers charged with the task of keeping our country safe are continuously threatened by furlough.

Even President Bush — an oilman himself — saw the value in increasing royalty rates on federal offshore leases. He increased the rate to 18.5%.  Yet onshore, royalty rates are stuck at 12.5%, costing states millions each year.  The industry will claim that higher royalty rates will hurt domestic energy production, but in Texas — our country’s biggest energy producer, royalty rates stand at 25% on state lands.

Just last year, the Department of Interior held a record-breaking lease sale in the Gulf of Mexico.  Conversely, taxpayers forked over billions in subsidies to the industry last year, while veterans and seniors saw their benefits cut.  It’s time industry share in the same cost cutting that families across America have endured for years.

But carte blanche for oil and gas doesn’t end there. Last year, the Bureau of Land Management (BLM) issued over four thousand on-shore drilling permits to oil and gas companies. Of those four thousand, a full third went undrilled.  We won’t hear about that this fall.  Instead, we’re likely to hear House Republican leaders talk about how red tape and government regulations are preventing the oil and gas industry from creating thousands of jobs and reducing gas prices.  Truth is, of the over 37 million acres currently leased to oil and gas interests nationwide, just 12.5 million are in production. That’s 24.5 million acres locked away by oil and gas that could be used by other industries like recreation, ranching, and farming.

Out West, businesses cite access to public lands and the environment as a primary reason for locating or expanding their operations, and economists have noted public lands increase per-capita income across the region. At Western Values Project we understand that conservation and energy production both provide jobs and revenue to state economies. But diversity is key.  In Montana, mining operations including the oil and gas industry made up just 2% of the total workforce.  Our government shouldn’t forsake other sectors of our economy for short-term concessions to a single industry.

Congress and the Obama administration must make fixing our broken system a priority this fall.  The American people deserve rightful compensation for the resources extracted from their lands.   For generations, sportsmen, farmers, ranchers, loggers and families have balanced their checkbooks and made tough decisions.  It’s time for Congress to do the same. Rather than continued gridlock and inaction, Westerners are demanding equal attention to the issues they care about.  Our economy depends on it.

Join the effort to strengthen the American West.