PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The Senate Tax Bill and ANWR: Good News for the Economy and Small Business

By at 13 December, 2017, 12:23 pm

The tiny Section 1002 area (in the map of Alaska above) would be open to oil and natural gas production if the House-Senate conference committee adopts a provision in the Senate-passed tax bill, and if the legislation is signed by President Trump. (Map image courtesy of ANWR.org)

by Raymond J. Keating-

The U.S. Senate-passed “Tax Cuts and Jobs Act” would allow for oil and natural gas production in the Arctic National Wildlife Refuge (ANWR). That would be a clear positive for the state of Alaska, for small businesses, and the economy.

In a joint statement released by Alaska’s three Members of Congress – U.S. Senators Lisa Murkowski and Dan Sullivan, and U.S. Rep. Don Young – Murkowski said. “Opening the 1002 Area and tax reform both stand on their own, but combining them into the same bill, and then successfully passing that bill, makes this a great day to be an Alaskan.”

Senator Sullivan added, “Allowing development in the coastal plain, an area specifically set aside for exploration and development, is a win for Alaska and a win for the nation. It will create thousands of good paying jobs, restore faith in our economy and drive investments in our communities.”

Interestingly, the area was set aside by President Carter and a Democratic Congress in 1980 for potential oil and gas production.

Rep. Young also noted, “Alaska is home to a vast amount of natural resources, and through the development of ANWR, we will strengthen our economy by creating new jobs and generating new revenue… As we move forward, particularly through the Conference Committee process, I will work with my House colleagues to ensure Alaska’s interests are protected and our energy sector continues to be a global leader. This is crucial for the economic growth of our state and nation, but also for countless families, communities and small businesses.”

Key Facts on ANWR

Indeed, it’s important to keep the facts straight on an issue that has been misrepresented by the environmental movement for decades. When this measure was reported out of the Senate Energy & Natural Resources Committee last month, it was noted:

“The legislation authorizes limited and responsible energy development on 2,000 federal acres in the non-wilderness portion of the Arctic National Wildlife Refuge (ANWR) in Alaska, known as the ‘1002 Area’ or Coastal Plain. The Congressional Budget Office estimates the legislation will raise nearly $1.1 billion over the 10-year budget window. Between rents, royalties, and federal taxes, it will raise substantially greater revenues once production from the 1002 Area begins.”

Also, given the vast efficiency and technological gains achieved in the area of drilling over the past dozen-plus years, actual oil extracted from the area promises to be far greater than the often-cited value of between 3.4 billion and 10.4 billion barrels, and environmental protections and safety have improved from already-stellar levels.

Unreasonable Opposition

In the end, the only “reason” to oppose opening up this small slice of ANWR to exploration and development would be a blind allegiance to a radical form of environmentalism that opposes all development and production of carbon-based energy.

Small Business Benefits

From a small business standpoint, America’s entrepreneurs and their employees not only would benefit from increased U.S. energy production from price and reliability perspectives, but also in terms of the significant role small firms play in the energy business. According to the latest data from the U.S. Census Bureau (2015):

● 89.6% of employer firms among oil and gas extraction businesses have less than 20 employees;

● 77.3% of employer firms among drilling oil and gas wells businesses have less than 20 workers;

● 80.7% of employer firms among support activities for oil and gas operations businesses have less than 20 employees,

● 58.2% of employer firms among oil and gas pipeline and related structures construction businesses have less than 20 workers,

● and 51.5% of employer firms among oil and gas field machinery and equipment manufacturing businesses have less than 20 employees.

Senators Murkowski and Sullivan, and Rep. Young deserve thanks for their persistence and hard work on this issue. Now, it’s important for the Conference Committee on the House and Senate tax bills to keep this smart, productive element in the final legislation.

Opening ANWR to energy exploration and development is a positive, common sense step that promises to strengthen U.S. energy independence, while boosting small business, jobs and the economy in Alaska – where support for such a step remains strong – and across the nation.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

 

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