Energy and Environment
Our nation is blessed with abundant energy resources. From traditional energy sources like oil, natural gas, coal, and nuclear, to promising new sources like wind, solar, geothermal, and others, we must have a national energy strategy that is rooted in reality and focuses on what works. We need a comprehensive national energy policy that ensures American businesses and consumers have access to inexpensive sources of energy, protects our environment from damage, and promotes the American economy.
Right here in Texas, entrepreneurs have touched off a revolution in energy production, pioneering techniques like horizontal drilling and hydraulic fracturing. These techniques have dramatically expanded the size of our energy reserves and hold the potential to allow our nation to be energy self-sufficient in fewer than 20 years. They have also touched off an economic resurgence in the Permian Basin, South Texas, South Dakota, Pennsylvania, Ohio and other places across the country.
Energy production does not need to come at the expense of environmental safeguards. All Americans, no matter what their political stripe, should strive to be good stewards of the Earth and the bounty we have been given. We must balance the benefits of environmental standards with the cost to implement them.
Alongside traditional fuels, renewable technologies like wind, solar, geothermal, and others are rapidly advancing here in Texas. These energy sources currently produce a small fraction of our total energy needs, but in time as they become cost competitive with fossil fuels, they will represent an important part of our energy portfolio.
Our nation’s energy sector remains one of the few bright spots in our economy, despite this administration’s best efforts. I have opposed the Obama administration’s efforts to slow-walk new permits, nationalize hydraulic fracturing regulations, install complicated and costly new regulatory burdens on power plants, and impose a backdoor cap-and-trade scheme through the rulemaking process.
The president seems fixated on eliminating the deduction independent oil and gas companies can take for their intangible drilling costs and the percentage depletion deduction as a way to balance the deficit. While the president finds it convenient to characterize these two tax provisions as loopholes and giveaways to giant oil companies, they are not. They have been part of the tax code for decades because drilling for oil is a risky, capital-intensive business built around a declining asset. These two provisions allow independent oil and gas companies to generate the cash they need to continue to drill and explore for resources.
Eliminating these deductions would do little, if anything, to raise revenue, but they would have enormous consequences for our local economy, as the cash available to drill new oil and gas wells could fall by a third overnight. For our nation it would mean higher oil and gas prices, but for West Texas it would mean fewer jobs, lower lease revenues, and declining local tax revenues. I have and will continue to oppose the president’s politically-motivated attacks on our oil and gas industries and jobs.