Energy Costs and Infrastructure - Part 3
- davidcogd
- Sep 22, 2024
- 3 min read
The Second Post in this series covered a proposal to reduce oil prices and at the same time retain stable gas prices and provide funding for Infrastructure.
The reduced price in base energy cost would be mostly offset by an increase in fuel taxes for gasoline and diesel. See details in previous report.
This creates an increase of over $100 Billion in funding for Infrastructure to the dedicated Highway Trust Fund.
That is approximately 50% more than current spending on Infrastructure, which is desperately needed.
Besides stabilizing Gas Prices near or below current levels and building Infrastructure, there are other significant benefits covered in this Report.
Oil Rigs and Employment:
Oil Rigs In Operation In U.S.
2016 509
2018 1057
2023 588
In the first Two Years of the Trump Administration, the Oil Rig count more than doubled.
That created many high paying jobs. The average price of regular gasoline in 2017 was $2.60 per gallon.
Under Biden-Harris, the Oil Rig count has fallen by 44% to 588 Rigs in 2023. The average price of regular gasoline in 2023 rose to $3.68 per gallon. That is an increase of 41% in the price of gas.
Interesting correlation between the reduction of Oil Rigs by 44% and the increase of Gasoline price by 41%.
Employment Potential:
The annual average earnings for direct labor on oil rigs is about $95,000, including operators and support staff.
Every added Oil Rig would create approximately 700 new high pay jobs. (Direct and Indirect).
It is estimated there are 200 – 400 Oil Rigs that have been “Idled” or “Stacked.” Many of these could be reactivated with the right Policy in the U.S.
If the U.S. reactivated and added 500 Oil Rigs it would create:
350,000 New Jobs with average annual wages of $ 95,000 = $30.3 Billion.
Infrastructure and Employment:
Construction jobs for Oil Rigs
Approximately 300 Jobs are needed for Construction of an Oil Rig
Assume that New Policy creates 250 New Oil Rig Builds. That would create 75,000 New Jobs.
75,000 New Jobs with average annual pay of $70,000 = $ 5 Billion
Construction Jobs for Highways, Bridges, and Mass Transit
Additional Spend of $ 100 Billion could create up to 2 Million new High Pay jobs (Direct and Indirect).
2 Million New Jobs with average annual wages of $ 60,000 = $ 120 Billion.
Employment Summary
The above totals to 2.4 Million New Jobs.
The Annual Income of these jobs totals $ 155 Billion !
THAT IS HOW TO GROW AN ECONOMY AND HELP THE MIDDLE CLASS.
SUMMARY
The Major Premise of this plan: As Energy Costs reduce, Fuel Taxes increase to maintain a stable level of fuel price at the pump.
This creates the additional $100 Million in funding for Infrastructure. There is no question that U.S. Infrastructure has been neglected and requires an upgrade.
The Fuel Tax Policy is also premised on the concept that those who use the highways should pay for them.
“If You Use It, You Pay For It.”
That is the fairest way to allocate a public cost. Commercial Vehicles pay more.
Keeping the current levels of price at the pump will also discourage the increase in consumption that would normally come when prices are lower. That avoids an increase in CO2 emissions from vehicles.
Energy Independence would also mean that surplus oil and natural gas could be Exported which would help correct the Deficit in the U.S. Balance of Trade.
The Personal Income from the New Jobs will increase Income Tax Revenue to the Federal Government. Hopefully it will be used to reduce the Budget Deficit, and not Spent.
What does it take to make this happen?
Political Will and Leadership which is unfortunately lacking in our Country today.
Politicians have been afraid to touch the gasoline fuel tax since 1993. They fear the popular pushback from people who do not understand the plan.
Who will step up with the courage to submit legislation to implement a plan like this?
It would be a welcome event for either candidate for President to show some Real Vision.
David Hollaender September 22, 2024
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