Biden Nominee For Comptroller Of Currency Wants To Bankrupt Smaller Players In Oil & Gas Industry

Photo Credit: Public Domain

By Bethany Blankley [The Center Square contributor] –

President Joe Biden’s nominee for the comptroller of the Currency, Saule Omarova, said she wants to bankrupt smaller players in the natural gas, oil and coal industries to help reverse climate change.

Omarova, a Cornell University law professor, said in a Jain Family Institute’s Social Wealth Seminar in February that “a lot of the smaller players in the oil and gas and coal industry will probably go bankrupt in the short order, or at least we want them to go bankrupt if we want to tackle climate change.”

Omarova’s nomination has been criticized by Republicans and business groups who say she is extreme, particularly when it comes to her views on the oil and gas industry.

The oil and gas industry provides the majority of U.S. energy supply, and contributes more in taxes and jobs than any other industry in the private sector.

The Texas Oil and Gas Association notes that the oil and gas industry pays 6.3 times more in taxes on a per job basis than the average of the rest of the private sector.

In Texas – the state that produces the most oil and gas in the U.S. and the world – the industry paid $13.9 billion in state and local taxes and royalties in fiscal year 2020, funds that directly supported Texas schools, teachers, roads, infrastructure and essential services.

Even during the state’s shutdown last year, the industry contributed “tremendously to state and local tax coffers, while fortifying our energy security and leading the way in innovation and investment that is advancing environmental progress,” TXOGA President Todd Staples said. “The ongoing recovery of the oil and natural gas industry is essential to the state’s continuing economic improvement.”

And while oil prices plummeted and the industry saw losses last year, the need for products made from oil and natural gas skyrocketed. Nearly every in-demand product Americans needed for safety – from face shields to hand sanitizers to high-speed internet connections and computers – was only made possible by oil and natural gas.

Additionally, the Western Energy Alliance notes that 6,000 products Americans use on a daily basis come from oil and gas. And bankrupting smaller players would kill western states’ economies, the alliance argues.

In Wyoming, for example, the oil and gas industry supported 68,600 jobs statewide in 2019, or 16.6% of the state’s total employment. The industry generated 26.3%, $10.6 billion, to the state’s gross domestic product, and $6 billion in labor income, or 25.6%.

“Wyoming’s success is intrinsically linked to the natural gas and oil industry,” Petroleum Association of Wyoming President Pete Obermueller argues. “Every state across the country – both blue states and red states – rely on American energy to fuel each sector of the economy and support millions of U.S. jobs.

Omarova’s plan could transform these profits into losses.

In New Mexico, oil and gas contributed $2.8 billion to the state’s budget in 2020, or 33.5%. That includes nearly $1.4 billion for public schools and higher education, $640 million for health and human services, and $157 million for public safety, among many other public spending priorities, the New Mexico Oil and Gas Association said.

Additionally, the costs associated with Biden’s ban on federal leasing could total $33.5 billion in lost GDP and $8.3 billion in lost tax revenue for eight states by the end of his term, a recent Wyoming Energy Authority study estimates. The states most affected – Alaska, California, Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming – represent more than 97% of federal onshore production. Nearly 58,700 jobs are expected to be lost annually and workers will lose over $15 billion in wages, the group estimates.

Omarova’s plan could make these losses permanent, those in the industry argue.

In Louisiana, offshore royalties contributed $155 million to Louisiana’s budget. Louisiana Oil & Gas Association President Mike Moncla argues, “Since President Biden took office, his administration has made it a top priority to decimate the American oil and gas industry to meet his unrealistic climate goals.

“Pushing for an increase in foreign oil consumption hurts states like Louisiana who rely on energy production for job creation and tax revenue. If the White House truly wants to expedite the post-COVID economic recovery, they should rely on energy companies here in the United States, not foreign entities that seek to exploit other nations to fill their pockets.”

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According to U.S. Department of the Interior Natural Resources Revenue Data, federal offshore revenue from January to August of this year was $2.9 billion; federal onshore revenue was $3.1 billion.

In 2019, the U.S. led the world in natural gas and oil production, supporting more than 11.3 million total jobs or 5.6% of total U.S. employment. It also generated an additional 3.5 jobs in the U.S. economy for every direct job in the U.S. natural gas and oil industry.

In 2019, the industry produced $892.7 billion in labor income, or 6.8% of the U.S. national labor income. It also supported nearly $1.7 trillion to U.S. gross domestic product, accounting for 7.9% of the national total.

Omarova’s plan would reverse U.S. dominance in the oil and gas industry, making it dependent on foreign sources for energy and weaken national security in the process, industry leaders argue.

TXOGA President Todd Staples told The Center Square, “We have the best country in the world. We have the best opportunities for upward mobility, for advancement and for a high-quality of life. Affordable, reliable and abundant energy supplies brought forth by the Texas oil and natural gas industry has allowed a fair, market-based system to work and we must not forfeit energy freedom for energy dependence. We must continue to encourage smart, science-based policies that advocate for homegrown production, domestic jobs and economic advancement that benefits all Texans and every American.”

About the Author: Bethany Blankley is a writer at the Center Square, Patheos/Hedgerow, political analyst and former press secretary at Capitol Hill / NY / WDC. Follow Bethany on Twitter @BethanyBlankley.