Fossil-fuel extraction on public land yields massive economic boom, kind of

By Philip Bump

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This is what a government windfall looks like (in Bizarro America).

Good news from the L.A. Times:

Energy development on public lands and waters pumped more than $12 billion into federal coffers in 2012, $1 billion more than the previous year, according to the U.S. Department of the Interior.

“These revenues reflect significant domestic energy production under President Obama’s all-of-the-above energy strategy and provide a vital revenue stream for federal and state governments and American Indian communities,” Interior Secretary Ken Salazar said in a statement.

Yes! Win win win win win. Winners all around. Lots of cash money/moolah just pouring out of the ground like so much crude oil, thanks to the president’s staunch commitment to fossil fuels. Everyone line up for your cut! [PDF]

Just such good news. But we need to do a smidgen of accounting work here.

So: $12 billion in profits from fossil-fuel extraction, great. Of course, $4 billion of that goes back to oil companies in subsidies, so it’s really more like $8 billion. Oh, plus another billion or so to the coal industry. So $7 billion. Still good!

We should also probably consider that the use of those fossil fuels results in $120 billion in healthcare costs each year. In 2009, 35 percent of U.S. healthcare spending was from Medicare and Medicaid [PDF]. Thirty-five percent of $120 billion is $42 billion. Hm.

And then there’s that $50 billion that Obama is seeking to repair damage from Hurricane Sandy. But let’s take only the $5 billion the New York area Metropolitan Transportation Authority needs due to the flooding that was certainly made worse by climate change. Don’t want to be unrealistic, after all!

So, let me get out the adding machine here … Boom. Done. That brilliant all-of-the-above energy approach has indirectly resulted in a rock-solid economic benefit of negative $40 billion to the U.S. economy.

As Assistant Secretary Rhea Suh said in the Interior Department’s press release, “The reforms we have undertaken over the last two years are paying off — quite literally — and I could not be more proud of the work that these public servants perform day in and day out on behalf of the American taxpayer.”

Indeed.

Source

Energy development on public lands generated $12 billion in 2012, Los Angeles Times

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Fossil-fuel extraction on public land yields massive economic boom, kind of