Traditional sources of fuel, such as oil, natural gas, and coal, play a crucial role in providing energy that Americans rely on. These sources are not only essential for the U.S. and states’ economies but also contribute significantly to meeting the energy demands of the nation. Republican attorneys general maintain that these traditional fuel sources remain vital for powering various sectors and industries.
On Thursday, 19 GOP attorneys general filed a complaint with the Supreme Court, arguing in favor of oil, natural gas, and coal production. They are suing five Democratic-led states, including California, whose policies they claim are not only unconstitutional but also have harmful consequences for their respective states.
In their complaint, several members of the coalition, led by Alabama, highlight the advantages of relying on traditional energy sources.
Alabama plays a significant role in the production of natural gas, ranking 16th among the top producers. The state’s economy greatly benefits from the mining, oil, and natural gas extraction industries. A complaint highlights the substantial contributions made by these sectors. As per a report by the Bureau of Economic Analysis, workers in oil and natural gas extraction received a compensation exceeding $54 million in 2022, while those in pipeline transportation earned over $86 million.
Alabama collected approximately $1 billion in tax revenue during fiscal year 2022. This revenue came from sources such as gasoline tax, oil and natural gas privileges, and production. Additionally, the state’s trust fund received $67.9 million in royalties from the development of natural gas in Mobile Bay, as stated in the complaint.
According to a report from the Bureau of Economic Analysis, individuals employed in the oil and gas extraction industry in Alaska earned a staggering $875 million in compensation in 2022. Furthermore, the report reveals that total petroleum revenues amounted to a significant $3.8 billion in fiscal 2023.
Alaska’s North Slope is home to “6 of the 100 largest oil fields in the United States and 1 of the 100 largest natural gas fields,” according to the complaint. The region is believed to hold around 50 trillion cubic feet of discovered gas, 194 trillion cubic feet of undiscovered conventional gas, and 125 trillion cubic feet of unconventional gas. Additionally, the North Slope has already produced over 18 billion barrels of oil and is estimated to still hold over 48 billion barrels of undiscovered oil. However, the indigenous communities that depend on this production argue that they are being targeted by the Biden administration, as reported by The Center Square.
Mississippi’s economy is described as “energy-intensive” with a significant energy infrastructure, according to the complaint. The state boasts numerous natural gas, crude oil, and refined product pipelines, as well as the tenth largest petroleum refinery and one of the largest natural gas processing plants in the country. In 2022, the oil and gas extraction sector alone generated over $63 million in compensation for workers, while pipeline transportation received over $105 million, as reported by the Bureau of Economic Analysis.
According to the complaint, Mississippi is one of the five states with the lowest average gasoline prices. However, it is also among the top ten states with the highest gasoline expenditures per capita. In fiscal 2023, Mississippi generated significant tax revenue from traditional energy sources. This included over $307 million from its gasoline tax and over $51 million from oil and gas severance taxes.
Missouri heavily relies on coal for generating two-thirds of its electricity, making it the fourth largest coal-dependent state in the nation. The state is not only a net energy consumer but also faces significant economic challenges due to rising energy prices.
Nebraska, known for its production of crude oil and natural gas, holds the distinction of being the second-largest ethanol producer. The compensation for workers in the oil and gas extraction industry surpassed $5 million in 2022, while those in pipeline transportation earned over $18 million. Notably, Nebraska generates more than $300 million in fuel tax revenue annually, as highlighted in the complaint.
North Dakota holds the distinction of being the third-largest state in terms of crude oil reserves and production, following Texas and New Mexico, as per the U.S. Energy Information Administration. Moreover, it also stands as one of the top ten states in fuel ethanol production. With its six ethanol plants, North Dakota contributes approximately 547 million gallons annually, accounting for 3.5% of the nation’s total ethanol output.
North Dakota is home to almost 2% of the natural gas reserves in the United States. Additionally, it boasts the world’s largest known deposit of lignite, which is a type of low-rank coal. As the fifth-largest coal producing state in the country, North Dakota contributes 5% to the total coal production in the United States. Notably, in 2022, the state’s coal-fired power plants generated 55% of its electricity.
According to the complaint, North Dakota has generated more than $1 billion in tax revenue from lignite coal severance and conversion taxes since 1975. Additionally, the coal industry has provided employment opportunities to over 3,300 individuals directly and 11,000 individuals indirectly.
North Dakota’s oil and natural gas industry contributes over $42.6 billion to the gross business volume. In 2021, the industry employed nearly 50,000 individuals and had a payroll of $3.9 billion. Additionally, it generated $3.8 billion in state and local tax revenues.
Between 2017 and 2022, North Dakota collected more than 51% of its taxes from oil extraction and production, according to the complaint. These taxes have been crucial in funding various initiatives such as infrastructure investments, education, tax relief, budget stabilization, and research investment.
The Center Square reported that the Texas oil and natural gas industry achieved remarkable milestones last year. It recorded the highest ever production, exports, refining outcomes, and crude oil supply. Additionally, Texas led the nation in reducing emissions. The industry’s contributions to the state were equally impressive, as it paid a staggering $26.3 billion in taxes and royalties. This translates to a daily funding of $72 million for crucial public services such as schools, universities, roads, and first responders.
The U.S. House has passed a series of bills and resolutions to show their support for the vital oil and natural gas industry. According to The Center Square, these measures received support from a small number of Democrats, mainly from Texas.