Newt Gingrich Letter

Paying off the national debt with more energy and lower prices

Two very large numbers are essential in the American public debate today. They are so big that they are almost inconceivable.
The first number is 15.5 trillion. That’s a 14 digit number.
$15.5 trillion is the size of the U.S. national debt—more or less the amount the federal government owes individuals, organizations, and governments that have loaned money to it. To put this number in a more human perspective, it’s roughly $50,000 for every person in the United States.
$50,000 is more than the U.S. median income, about $44,000. That means if a normal, working American worked an entire year and devoted his or her entire income to nothing other than paying off their share of the national debt, they still wouldn’t pay off the full amount.

Today’s national debt is so large that it is very difficult to imagine a solution. President Obama has added $4 trillion during his administration alone. That means the Obama administration in three years has added nearly 40 percent to the national debt.

The problem of balancing the budget and reducing the national debt didn’t always seem so insurmountable. When I was Speaker, we balanced the budget for four straight years, resulting in real surpluses and paying down the national debt by $400 billion. When I left the speakership in 1999 the entire public debt was scheduled to be paid off by this year, 2012.
The government even began preparing for the possible difficulties this could cause the financial system, since if the U.S. paid off its entire debt there would be no more U.S. Treasury bonds. As NPR said in its story uncovering the secret report last year, the danger has clearly passed. Irresponsible Republican leadership in the early 2000s, when we never passed a single balanced budget, and the Democrats’ explosion in spending and the size of government since meant the prospect of paying off the debt disappeared long ago.

Today the obvious means of paying off the national debt are all unpleasant. Both taxes (which take money from Americans directly) and inflation (which take it from us indirectly) would be very painful for the American people, making it less likely that anything will be done about this serious problem.
That’s where the second very large number could come in: 1.44 trillion (a 13 digit number).
1.44 trillion is the number of recoverable barrels of oil estimated to be in the United States, waiting to be produced. That’s about the amount of oil the entire world has consumed since the first well was drilled before the Civil War. In addition, we have an estimated 2.744 quadrillion (a 15 digit number) cubic feet of natural gas.

Much of these resources are on federal lands, meaning the American people own them.

In a recent interview with the Wall Street Journal, Harold Hamm, a major developer of the Bakken formation in North Dakota, said he calculated that “if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, I truly believe the federal government could over time raise $18 trillion in royalties.”
That is more than our current national debt—the first number, $15.5 trillion.
This potential for new federal revenue without new taxes opens up a third possibility that is much less painful than taxes and inflation: the government could simply lease the rights to develop the energy resources in various tracts of federal land.
As Mr. Hamm’s calculations suggest, we should not underestimate the potential of an American energy program to go a long way toward restoring America’s fiscal health. Lease terms for producing oil and gas on federal lands, on-shore or offshore, include an agreement that companies will pay royalty shares on production to the government. For on-shore leases, the rate is one-eighth of production value; offshore, lease terms vary but range between 12 and 20 percent of the value produced.
In 2007, the federal government collected $9.4 billion in revenues on offshore drilling in the OCS. Considering only 2 percent of federal OCS lands are available for production, that would be $470 billion if it earned the same rate off all OCS lands.

Clearly, there is enormous potential revenue for the federal government locked up in lands we are currently doing nothing with, at a time of exploding deficits and fiscal downgrades.
Opening up American energy production would be a boon to cash-strapped state governments, as well. Revenue from on-shore resources is generally split 50/50 between the state and federal government.  While revenue sharing with states is not yet standard for offshore drilling on federal lands, the few recent leases that have been permitted have included similar arrangements. In 2006, lease terms gave Gulf states a 37.5 percent share of revenues.
This expanded production of American energy would create millions of jobs and bring down the price of gasoline to $2.50 a gallon or less.

It tells you the scale of our domestic energy resources that revenue from one-eighth their value could eventually pay off our national debt of $50,000 per person. It tells you the extent of the Obama administration’s extremism that it won’t let us tap them.

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  • Sue

    It is likely that many of the Companies would DRILL – there should be Pressure on them to do that – take away the Tax Breaks – & make it happen-  They are Drilling & Working in N Dakota saying Yahoo on Occassion as there =Unemployement is Under 4%  —it may be less but they have run out of housing- & places to put workers — The Idea is Going in the Right Direction – Anwar was purcashed to produce Oil for Americas Security & it sits & sits – Canada want to bring JOBS & Oil through An Already Approved Route through OK- LA -TX -  Could it be the Current Admin & POTUS Do not like the GOP Gov’s & they are being punished -  ? When Looking for a Answer lets ask the Tides Grp – Who Wrote the Healthcare Takeover- The Non Stimuless – & Now they are boycotting Keystone……  GE ‘s Immelt was “appointed” Jobs Czar  to Create New Jobs – & they laughed when asked why there were NO Shovel Ready Jobs…..  Immelt- GE  pays No TAXES  - & Shipped jobs to China – IS THAT FAIR ?    Newt got hammered with Negative Ads by Romney in FL folks- that is why Santorum slipped by him – I got the Email from his Camp Team & they Admitted it- So if you were the Scholar – the Author of the Conservative Movement – & Sant is just one of the many “players” Why shouldn’t we be looking at HIM – Not Ricky (who Obama would love to Crush) Why do you think they sent Dems to Vote in MI for Sand-bore-dum ?  Who do you think could Crush Obama in the DEBATES ?  There is only One Guy – that is the Author of the Contract for America – Which by the Way All the Items were passed Except the One we WOuld have loved to have Passed —TERM LIMITS  why  ? Because he couldn’t get the Lunatics even in his own Party to Help Pass it  . . . . . Maybe that is Why – they Do Not Endorse him – They Know he will DO What he Says – to the Best of his Ability – He is the Guy Folks   Ask Michael REAGAN -Thomas Sowell -Art Laffler -Chuck Norris-Fred Thompson and Obama’s Conservative Cousin & other Newt Supporters  Why they want him—    Conservapedia      & Wikipedia  Document  that all the Charges Were Dropped  & his Record in Congress     IMAGINE WHO COULD DEBATE OBAMA – THE BEST – WITH FACTS & FIGURES –& HANDLE THE HEAT – & WIN THE DEBATE-   THAT IS THE SPEAKER– Not Mr. Flip Flop – & Not the Boring Guy that is the Weakest Speaker I have ever seen …. yawn fest-  Seriously  Folks  & Have you Seen little Rickys Tax Return 1.5 ML as a DC Insider & Who he worked for For United Healthcare -$125K Advisor to lobbyist Grp for Natural Gas … & he acts like he is such a reformer & carrys the Conservative Message …. Not for the last  ? ? 18 years   Beaten Badly in his Own State — Wow Only one less Attractive is the Gov. in Mass that didn’t even RERUN because he knew he’d get beat……………………A heated debate between the candidates occurred on October 11, 2006.[109] Bill Toland of the Pittsburgh Post-Gazette described both candidates’ performances during the debate as “unstatesmanlike”.[109]
    In the November 7, 2006 election, Santorum lost by over 700,000 votes, receiving 41% of the vote to Casey’s 59%, the largest margin of defeat for an incumbent senator since 1980—Santorum’s 2004 endorsement of his Republican Senate colleague Arlen Specter over conservative Congressman Pat Toomey in the 2004 primary for Pennsylvania’s other senate seat. Many socially and fiscally conservative Republicans considered the Specter endorsement to be a betrayal of their cause.[113][114] However, Santorum says he endorsed Specter to ensure that Bush’s judicial nominees would make it through the Senate, as Specter was then the chairman of the Senate Judiciary Committee and the White House told Santorum that Specter would be more electable than the more conservative Toomey.[115] Santorum said that Supreme Court Justices John Roberts and Samuel Alito would not have been confirmed without Specter’s re-election and that those two justices made “a pretty good trade” for the objectionable endorsement.

  • siridh

    Santorum will not be able to beat Obama.  He’s let himself be caught up in a lot of personal values issues, i.e., contraception.  He let them get him into that and he should have known better.  They will take those slips and plaster them all over the media.  I don’t know if he can attract independents or people who may be fiscally conservative but socially liberal or libertarian.

  • USSLiberty