The Federal government could see an additional $24 billion in annual tax revenue over the next seven years if policymakers would lift restrictions on oil and gas activity on public lands, and $86 billion annually thereafter, according to a new report from the Institute for Energy Research.

In a study released in August, the CBO calculated that if restrictions on federal lands were lifted, additional gross proceeds from leases — primarily on the Outer Continental Shelf (OCS) — would total about $2 billion over the 2013-2022 period, with most of the revenue coming from OCS leases (see Daily GPI, Aug. 13, 2012).

The CBO study “was restricted to analyzing just one component of those benefits: lease revenues,” said Washington, DC-based Institute for Energy Research (IER), which conducts research and evaluates public policies for the energy industry. IER said it reviewed the larger economic effects of opening federal lands to oil and gas activity, including economic growth, wages, jobs and both federal, and state and local tax revenues.

IER estimates that action by Washington policymakers giving producers more access to federal lands would increase the gross domestic product (GDP) by $127 billion annually for the next seven years, $450 billion annually for the next 30 years and add $14.4 trillion of cumulative economic activity over the next 37 year. It would result in an additional 552,000 jobs annually over the next seven years, and $32 billion more in annual wages over that period.

It calculates that $24 billion would go into the federal tax coffers each year and $86 billion annually thereafter. An estimated $10.3 billion of additional tax revenue would be earmarked annually for state and local tax revenue over the next seven years, and $35.5 billion annually thereafter, according to the IER report.

The group looked at the tax revenue benefits for federal, state and local governments over a more extended period (37 years). It said the federal government would see an increase of $2.7 trillion over that period, while state and local governments would see an increase of $1.1 trillion.

In the CBO study, which was requested by the House Budget Committee, CBO evaluated “…only one small piece of the economic effect of opening federal tracts to oil and gas leasing. By ignoring the investment phase, the CBO — upon the instruction of Congress — substantially underestimates the economic effects of current policy choices. Moreover, by focusing on lease revenue and ignoring the potential for increased tax revenue, Congress has doubly downplayed the fiscal effects of such a policy,” IER said.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.