Congressman Mac Thornberry

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A Better Way to Strengthen Our Energy Sector

Energy is not only critical for U.S. national security, economic well-being, and stability, but also to the folks who live in our part of Texas where distances between communities are significant and our agricultural economy depends on energy intensive equipment.

Texas leads the nation in the production of crude oil and natural gas, and our petroleum refineries account for more than one-fourth of our nation’s refining capacity. The 13th district is also home to many small and independent producers that make up the back-bone of our domestic energy supply. We also have numerous wind farms and developers of other types of energy that are an important part of the mix.

No matter where I travel in North Texas one of the top concerns that comes up, especially for our energy producers, is all the red tape and regulations that are coming out of Washington.

Whether it is the EPA trying to regulate ponds and puddles on private property or the Department of Labor setting a one-size fits all rule for overtime pay, the heavy-handed approach this administration has taken has harmed everyone from small business owners down to the part-time workers. The “A Better Way” would eliminate excessive, burdensome regulations while making the rules that we do need more efficient and effective.

Our plan also focuses on policies that will help unleash the full force of our domestic energy sector:

It is important to remember that not everything that comes out of Washington is bad. In the past several years, we have been able to take some significant steps toward strengthening our domestic energy sector.

Lifting the oil export ban

As a part of the 2015 Omnibus budget bill, which I voted for, the 1973 oil export ban was lifted. Removing this ban on oil exports benefits our local oil workers and producers. Creating jobs in the oil field and lowering prices at the gas pump is simply good energy policy.

According to IHS, lifting the restrictions on exports will support nearly one million additional jobs and increase domestic crude oil prices and production. The non-partisan energy analysis company also estimates that “it [will] cut the U.S. oil import bill by an average of $67 billion per year” and increase the average disposable income per household by $391 in 2018. In addition, IHS estimates that removing the oil export restriction will reduce U.S. gasoline prices by as much as 12 cents per gallon.

Leveling the playing field for LNG

In 2015, I introduced H.R. 905, the “LNG Excise Tax Equalization Act of 2015,” which became law the same year.

This bill makes the excise tax on liquefied natural gas (LNG) and diesel comparable on an energy-equivalent basis. The federal excise tax on LNG and diesel has been set at 24.3 cents per gallon. Because it takes 1.7 gallons of LNG to produce the same amount of energy as a gallon of diesel fuel, LNG is being taxed 70 percent higher than diesel. The new law that will took effect in 2016 levels the playing field by applying the excise tax to LNG and diesel based on the amount of energy each produces, which is how it is applied to Compressed Natural Gas and gasoline.

To better understand the change to the excise tax, consider a diesel truck traveling 100,000 miles per year at 5 miles per gallon consumes 20,000 gallons of diesel fuel. An identical LNG truck would require 34,000 gallons of LNG to travel the same distance. While the LNG truck uses a cleaner, domestic form of fuel, it had to pay an additional $3,402 per year in taxes for using LNG.