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GOP AGs: Oil, natural gas, coal essential to U.S., state economies

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Traditional sources of fuel, oil, natural gas, and coal are essential sources of energy that Americans rely on, and are vital to the U.S. and states’ economies, Republican attorneys general argue.

On Thursday, 19 GOP attorneys general made the case for oil, natural gas and coal production in a complaint they filed with the Supreme Court suing five Democratic-led states. The policies, led by California, if the high court doesn’t intervene are not only unconstitutional but will also have detrimental consequences to their states, the AGs argue.

Several members of the coalition, led by Alabama, point out the benefits of traditional energy sources in their complaint.

Alabama produces the 16th greatest amount of natural gas; mining and oil and natural gas extraction are major contributors to Alabama’s economy, the complaint notes. According to a Bureau of Economic Analysis report, in 2022, workers in oil and natural gas extraction earned over $54 million in compensation; in pipeline transportation, over $86 million.

In fiscal 2022, Alabama received roughly $1 billion in combined tax revenue from its gasoline tax, oil and natural gas privileges and production. Its trust fund received $67.9 million in royalties from natural gas development in Mobile Bay, according to the complaint.

In Alaska, those working in oil and gas extraction earned over $875 million in compensation in 2022; in fiscal 2023, total petroleum revenues accounted for $3.8 billion, according to a Bureau of Economic Analysis report.

Alaska’s North Slope contains “6 of the 100 largest oil fields in the United States and 1 of the 100 largest natural gas fields,” the complaint notes. It’s estimated to hold approximately 50 trillion cubic feet of discovered gas, 194 trillion cubic feet of undiscovered conventional gas, and 125 trillion cubic feet of unconventional gas, the complaint states. The North Slope has produced over 18 billion barrels of oil and is estimated to contain over 48 billion barrels of undiscovered oil. But its indigenous communities, which rely on this production, they argue are being targeted by the Biden administration, The Center Square reported.

Mississippi also has an “energy-intensive economy,” the complaint states, with a “substantial energy infrastructure.” It includes “many natural gas, crude oil, and refined product pipelines,” the 10th-largest petroleum refinery and one of the largest natural gas processing plants in the U.S. In 2022, workers in oil and gas extraction earned over $63 million in compensation; in pipeline transportation received over $105 million, according to a Bureau of Economic Analysis report.

The complaint also notes that “Mississippi ranks among the 5 states with the lowest average gasoline prices, but among the top 10 states with the highest gasoline expenditures per capita.” In fiscal 2023, Mississippi received hundreds of millions of dollars in tax revenue from traditional energy sources, including over $307 million from its gasoline tax and over $51 million from oil and gas severance taxes, the complaint states.

In Missouri, coal provides two-thirds of its electricity output, the fourth highest in the country. Missouri is also “a net energy consumer and is greatly harmed by increases in energy prices,” the complaint states.

Nebraska, which produces crude oil and natural gas, is the second-largest producer of ethanol. In 2022, workers in oil and gas extraction earned over $5 million in compensation; in pipeline transportation, over $18 million. Nebraska’s fuel tax revenue is over $300 million every year, the complaint notes.

North Dakota, after Texas and New Mexico, ranks third for having the greatest amount of crude oil reserves and production, according to the U.S. Energy Information Administration. It’s also a top-10 fuel ethanol-producing state. Its six ethanol plants manufacture roughly 547 million gallons a year, or 3.5% of the nation’s ethanol output.

North Dakota holds nearly 2% of U.S. natural gas reserves; contains the world’s largest known deposit of lignite (low-rank coal) and is the fifth-largest coal producing state. North Dakota accounts for 5% of U.S. total coal production. In 2022, its coal-fired power plants provided 55% of its electricity generation.

Since 1975, North Dakota has received over $1 billion in tax revenue from lignite coal severance and conversion taxes, the complaint states. The coal industry also employs over 3,300 direct and 11,000 indirect employees.

North Dakota’s oil and natural gas industry accounts for more than $42.6 billion in gross business volume. The industry employed nearly 50,000 with a $3.9 billion payroll and paid $3.8 billion in state and local tax revenues in 2021 alone.

From 2017 to 2022, oil extraction and production taxes equaled more than 51% of all taxes collected by North Dakota, the complaint notes, funding infrastructure investments, education, tax relief, budget stabilization, and research investment.

The data excludes Texas, which isn’t part of the coalition. The Texas oil and natural gas industry broke multiple records last year, reporting the highest ever totals in production, exports, refining outcomes and crude oil supply, and led the U.S. in emissions reductions, The Center Square reported. It also paid $26.3 billion in taxes and royalties last year, translating to $72 million a day to fund public schools, universities, roads, first responders and other services.

Recognizing the importance of the industry, the U.S. House passed a series of bills and resolutions to support the U.S. oil and natural gas industry. Only a handful of Democrats, largely from Texas, supported them, The Center Square reported.