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Rep. Rob Bishop, Chamber of Commerce look to energy development in fiscal cliff negotiations

Published: Tuesday, Nov. 27 2012 4:26 p.m. MST

Congressman Rob Bishop speaks to Utah Law makers at the Capitol. Monday, Feb. 1, 2010. While Congress and the president wrestle over fiscal cliff negotiations, Bishop, R-Utah, and the U.S. Chamber of Commerce see one area of untapped potential for reducing the deficit, helping the economy and boosting revenues: energy development.

Scott G. Winterton, Deseret News

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While Congress and the president wrestle over fiscal cliff negotiations, Rep. Rob Bishop, R-Utah, and the U.S. Chamber of Commerce see one area of untapped potential for reducing the deficit, helping the economy and boosting revenues: energy development.

According to Reuters, President Barack Obama seeks to address the fiscal cliff by letting tax rates rise on incomes over $250,000. Republicans argue that it's possible to raise revenue without raising taxes by reforming the tax code and eliminating some loopholes.

Increasing the marginal tax rates would cost the economy an estimated 700,000 jobs, slow economic growth and fail to impact the deficit, Bishop argued in a letter sent to House Speaker John Boehner.

"It was reported in July that ending the Bush-era tax cuts for top income earners would raise about $80 billion in 2013," the Bishop letter said. "Aside from the negative impact the increases would have on the economy, this total falls short of the revenue needed to close these trillion-dollar-plus deficits. Instead, Congress should take immediate steps to reduce spending and find alternative ways to increase revenues."

The alternatives Congress should consider ought to include boosting revenues through increased economic activity, job creation and payments to the U.S. Treasury, Bishop said.

"The oil and gas industry contributes roughly $31.4 billion per year to the U.S. Treasury in bonus, rent, royalty and tax payments and an additional $38 billion in state and local taxes," Bishop wrote. "More favorable policies to allow for responsible development of federally-owned land and water would increase these figures considerably."

According to a Feb. 2012 Congressional Research Service report, the federal government owns roughly 635-640 million acres of land, or about 28 percent of the 2.27 billion acres of land in the U.S. The Forest Service, the National Park Service, Bureau of Land Management and Fish and Wildlife Service manage the majority of the land, which is mostly located in the West and Alaska.

The CRS report showed that federal land ownership in Utah accounts for 66.5 percent of the state, or more than 35,000,000 acres. Federal land ownership in Utah is only surpassed by federal land ownership in Alaska, California and Nevada.

Divesting the government of "its vast land holdings" could also help pay down the deficit and reduce spending, Bishop suggested.

"Strategically transferring ownership of these lands where it makes sense would reduce duplicative land management costs, boost revenues through the resultant economic activity of more productive and local land management and is consistent with the principles of federalism our founding fathers envisioned," he wrote.

Tom Donohue, head of the U.S. Chamber of Commerce, met with White House officials Tuesday to discuss the fiscal cliff. During the meeting, Donohue suggested easing energy regulations as part of a deal, thereby jumpstarting an economic recovering and generating revenue through growth.

According to The Hill, the Chamber wants to see the permitting process for drilling expedited and more federal lands opened for energy exploration.

"This is an extraordinary opportunity for our nation and it all depends on reforming our current energy policies to streamline permitting and open new areas of prudent development, all while taking care to protect the environment," Donohue told reporters on Nov. 13. "It can be done."

Shortly after the president was reelected, the administration announced it planned to close 1.6 million acres of Western land previously slated for oil shale development, The Hill reported. The plan would still allow for the development of 677,000 acres in Colorado, Utah and Wyoming, as well as 130,000 acres in Utah for tar sands production.

The Institute of Energy Research wrote in February that oil production on federal lands in the 2011 fiscal year declined by 11 percent, while natural gas production on federal lands declined by six percent. There was a 14 percent increase for oil production and a 12 percent increase for natural gas production on private and state lands during that time, the IER said.

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