CBO Scores Oil Shale Revenues at Zero
As Congress heads to a vote on Speaker Boehner’s proposal to fund the nation’s transportation and infrastructure needs by generating revenues via increased oil and gas drilling, a new revenue score from the non-partisan Congressional Budget Office (CBO) places the whole notion of the package under serious doubt. In fact, one of the more questionable parts of the drilling package is the inclusion of the PIONEERS Act, a bill that would gut a number of environmental laws in order to promote commercial oil shale development. As discussed previously, there is no such thing as a commercial oil shale industry in the United States. Hence, the notion of fulfilling our nation’s financial needs on what amounts to a delusion, seems particularly reckless. The CBO seems to agree - for it projected that oil shale development, as conceived by the PIONEERS Act, would generate no revenues through 2022. Zero. Nada. Zilch.
The fact that oil shale would not be able to contribute to the nation’s financial future did not seem to faze the primary sponsor of the PIONEERS Act, Representative Doug Lamborn from Colorado, who admitted to the Denver Post last week that oil shale “is not a real contributor to the highway transportation needs we have.” A remarkable pivot given that when the PIONEERS Act was introduced in November, Lamborn stated that one of the critical points of the bill was to “…create good paying American jobs and generate new revenue without raising taxes on families and small businesses.”
But the very reason the Boehner package exists, is to generate revenues through increased drilling in order to cover a budgetary shortfall in the nation’s transportation funding. To break it down to its parts, the funding component of the Boehner bill is basically held up by a three-legged stool composed of drilling initiatives: one leg is represented by a plan that would open up America’s coasts to increased offshore drilling; the second leg would allow new drilling in previously untouched areas of the Arctic; and the third leg would open Western lands to oil shale development. If this nation is going to sacrifice its natural heritage just to satisfy the nation’s transportation needs – a dubious proposition to say the least – then one would sure hope that the entirety of the concept is at least structurally and financially sound. The CBO score establishes that it is anything but sound, and that all three of the drilling initiatives combined would only generate $2 billion in five years – which amounts to at least an annual $30 billion dollar shortfall. When considering that oil shale’s contribution is practically nothing, and the other two drilling proposals are also not up to the task – that three-legged stool might as well be a pogo stick, because the House Republicans keep bouncing around the fact that the Boehner package is structurally doomed to fail.