Amid the fading prospects of his campaign, Newt Gingrich is returning to a subject that he knows a lot about. American energy and high gas prices.
The campaign announced plans today to purchase 30 minutes of airtime in key Super Tuesday states to air this lengthy video of Newt Gingrich explaining how as president he would bring down the cost of gasoline to $2.50.
And If you support his campaign today, he'll also throw in "well over a million jobs" for free.
I'm Newt Gingrich and I want to report to you that if we unleash the American people, we can be at the beginning of an extraordinary era where we rebuild the America that we love.
Now, when I say unleash the American people, I mean literally get the government to stop crippling our efforts to create a better future. This is a big topic. It is one I am going to come back to again and again, in the next few weeks.
But I want to start with a part of it that relates to national security, relates to your personal family budget, relates to the economy, and relates to balancing the federal budget, all four in one topic.
And it comes down to a simple idea: What if we had a program that enabled the American people to develop so much new energy that we were, in fact, no longer reliant on Saudi Arabia, Iraq, Iran. We didn't care what the Iranians did in the Strait of Hormuz because we were safe, in national security terms.
What if that new energy program created well over a million new jobs, high‑paying jobs, jobs that put Americans back to work and kept the money here at home that we had been sending overseas, giving us a dramatic improvement in our balance of payments, strengthening the dollar and giving us a chance to live much freer and more independently?
What if that very idea also meant that we'd have dramatic increases in federal revenue in the government without a tax increase but that, in fact, the federal government would have literally an entire new stream of money?
And finally, what if that big new idea meant that you personally were better off because you are buying gasoline for $2.50 a gallon, not for $3.89 or $4 as what some people project by the summer could be $5 or more?
How is that possible, you ask? Well, that is what is exciting, and that is one of the reasons I'm running for president.
I know that science, technology, entrepreneurship have made tremendous progress. And I know that the politicians in Washington, the old‑time establishment, the elite news media, the bureaucrats don't have a clue what's possible, or in some cases, they have a clue and they are opposed to it. And I want to cover both of those in the next few minutes.
But let's start with a historic fact that I think is going to change our understanding of America's future and our understanding of the energy possibilities.
That fact is called North Dakota. In North Dakota, there is a formation called the Bakken formation. It has a tremendous amount of oil. It has much more oil than the US geological survey used to think.
In fact, based on one US geological survey study, there is now 25 times as much oil as there was back when they first estimated it, not 25 percent more, 2500 percent more.
Now, the reason we know this is, I think, very illustrative of what is wrong with America. We know the Bakken formation exist in North Dakota because it is on private land, and liberals weren't able to block us from developing it.
So the people, the entrepreneurs, the business leaders who went in and developed that formation, they began to produce more and more oil. As one of them said, "They now find that almost everywhere they look, there is more oil."
What's the result? Well, the official unemployment rate in North Dakota is 3.5 percent, but that may actually be misleading because most of that 3.5 percent don't have the right training. It turns out that North Dakota's booming to such an extent that there is 16 to 18,000 new job, good jobs, 60,000 to 80,000 dollar‑a‑year jobs that aren't filled because the folks who need a job aren't trained, and the folks, the jobs they need, don't have people filling them.
Think about that. What would that be like in your hometown if the boom was so big that there were 16 to 18,000 unfilled jobs? How much better off would we be?
And guess what? When you have that kind of economic growth, you have an increase in revenue to the government. So the State government of North Dakota has had seven consecutive tax cuts, and it now has a rainy day fund of several billion dollars, even though the entire state budget is only about $2 billion.
So energy can lead to a bigger economy, more revenue for the government, better jobs for people. Now let's step all the way back and look at the other 49 states and look at the ocean around the United States.
If North Dakota has that much energy, how much do we think we have everywhere else? Turns out, we may have more oil in the United States today, given new science and new technology than we have actually pumped worldwide since 1870. We may, in fact, by one estimate have three times as much oil in the United States as there is in Saudi Arabia.
And remember, right now I am just talking about oil which were relates directly to gasoline, but there has been a parallel revolution in natural gas.
In the natural gas, we knew that technically there was a lot of gas in shale, but we did not know how to get it out. And people thought given the amount that could be recovered, as recently as the year 2000, they thought that natural gas was a declining commodity. It was a perfect example of what has been called "Peak Production"; we have already used up over half of it.
In fact, as recently as about 2000, people thought there was about seven years supply left. They were literally talking about getting liquefied natural gas out of the Middle East, putting it in giant refrigerator ships, bringing it to the US, unloading it here, because the chemical industry, in particular, needed the gas.
All of a sudden, somebody had a really bright idea. They took a technology which had been developed for ocean drilling, because ocean platforms are really expensive, and so when you drill one rig on the ocean platform, you want it to go as many places as you can.
So they developed really brilliant techniques for going out horizontal. They come down with one, and then it goes out in every direction. And all of a sudden somebody figured out, gee, if you could do that with natural gas and at the same time, if you could fracture the rock in a way by using steam and water that you could actually get the gas to come into one collection point, you could get a lot of gas out of the shale.
The net result was that we now have in shale tremendous amounts of natural gas that is recoverable. In fact, the most recent estimate is that we may have over a hundred year’s supply of natural gas. Think about that.
In one short decade, we went from seven years supply to over a hundred years supply because science and technology had improved so much. Furthermore, instead of us importing liquefied natural gas from the Middle East, there is now serious talk that we're going to build facilities in Houston, and we're going to ship liquefied natural gas to China.
So we will be making money exporting natural gas where people thought we would be giving up money 10 years ago importing natural gas.
Now, what does this mean? It means in places like the Marcellus Shale in Western Pennsylvania, in the areas of eastern Ohio, cutting down all along the Appalachians, all the way out to Dallas, Texas, there is formation after formation after formation.
And the result is not just money for big oil, but people who own the property, farmers. I have talked several years ago with Governor Jindal of Louisiana who just had run into a farmer who suddenly discovered that he had natural gas on his farm and he had been given an amazingly big check by the natural gas company, and do so he was very happy to find out that he had a better income, he was going to get royalties, and therefore, the local economy around Shreveport was really beginning to grow.
Now, I give you that background because these new sciences, these new technologies and the entrepreneurs who use them are giving us dramatic new opportunities. This really matters for some very practical reasons.
First of all, since the mid‑1970s, we've known that the Arab states and Iran combined have dominated oil production and have used their leverage to raise the cost of oil and to bring political pressure to bear on the Americans and on the Europeans.
Now, I want to get to a point where we produce so much oil in the United States that no American president will ever again bow to a Saudi King. I thought, frankly, it's time that we tell the Saudis the truth: We know that they are the largest funders of schools called madrassas, which teach hate. We know that they spend several billion dollars a year exporting a very, very extreme version called Wahhabism, and we know that they are not straight with us.
And up until now, our presidents have been too cautious to say, "Oh gee, I don’t want to offend the Saudis. I don’t want them to do something with their oil supply."
Well, we have an opportunity now to turn that around. We have an opportunity to build up the American oil supply, the American natural gas supply, so we can then tell the Saudis the truth, so we can deal with them from a position of strength, so we can no longer worry about the Persian Gulf.
And at that point, if, in fact, the Iranians want to do something with the Straits of Hormuz, maybe the Chinese have a problem or the Indians have a problem or the Europeans have a problem. But I am not sure at that point that the Americans will have a problem if we become once again what we were in World War II, the leading producer of oil in the world.
And, in fact, there is at least one study already out there says by 2017 if we do the right things, we will produce more oil than either Russia or Saudi Arabia, and we will regain, by the end of the decade, being the leading producer of oil in the world.
What I want to do is accelerate that for a couple of reasons: First of all, to get this economy back on track. If you had $500 billion a year that was not going overseas, that was paying royalties in the US, paying landowners, paying people to go out and develop the oil, pain in the pipeline builders, you would suddenly have a really booming economy right here at home. We have an opportunity to really help our economy.
There is a second part: Every time gas prices go up, they are the equivalent of a tax on working Americans and retired Americans. Think about it: You go to the gas station. If you are paying $4 a gallon, you have a lot less money left each week than if you are paying $2.50 a gallon. Now $2.50 may sound like it is an impossible number, but that's baloney.
When I was Speaker of the House, we paid $1.13 on average during the four years that I was speaker. When Barack Obama became president, we paid $1.89 that week.
But the Obama administration is so anti‑oil, so anti‑gas, so anti‑fossil fuels in general, including coal that basically their view is: If we have lots of fuel, they don't want it. They are prepared to do almost anything to stop the development of these kinds of programs. You may think I'm exaggerating, but let me give you an example.
In North Dakota where the developments are on private land, so the liberals have not been able to stop them, the Obama US attorney for North Dakota filed a lawsuit because eight migratory birds had been found dead near oil fields.
Now I want you to think about this: Thousands of migratory birds are killed every year by wind turbines. But wind turbines are one of President Obama's favorite alternative fuels, so they are green. Therefore, although they kill birds, they are green so they are good even though what they are doing may not be good.
And I happen to think wind is a legitimate source of energy, and I have noticed often, for example, that Iowa produces 20 percent of its electricity from wind, the second larger producer in the world after Denmark. So I am not anti‑wind, but I think it is fascinating: The selective prosecution of oil companies over eight birds because the ideological radicals in the Obama administration so deeply dislike using oil.
You have the same challenge with the way in which we now fracture ‑‑ called "fracking" ‑‑ and the Obama administration has literally assembled multiple agencies to hold workshops to try to figure out how to stop it. It is almost as though anything which succeeds, anything which enables Americans to have a better life with more income, with less expensive energy is somehow bad.
To show you how far this is going: Even though we have today the highest price average cost of gasoline in history. That’s right, President Obama has taken us from $1.89 to the most expensive gasoline on average we have ever had. They are still not satisfied. The Environmental Protection Agency under President Obama has a proposal for a brand‑new regulation that would, on average, raise the cost of gasoline another $0.25.
And that is still not enough: Secretary of energy, Secretary Chu, who in many ways ought to be called the secretary of anti‑energy said before he was named Secretary, "He really wanted American gasoline prices to reach the European level." That would be $9 a gallon.
Now you have two be somebody who does not understand America if you think the people who live in a state like Montana, Washington State, Idaho, Minnesota, for that matter Michigan. Look at the distance you drive from Detroit to go up to Mackinac Island or to go to the Upper Peninsula. Look at the distance you drive in Arizona or in my home state of Georgia, the largest state east of the Mississippi, the distance from Atlanta to Sea Island or the distance from Albany up to North Georgia, to Dalton.
I think there are a lot of academic liberals, and Dr. Chu is one of them, who live on a nice campus and they live will bicycle to their lab. They have no idea how the average American works. And frankly, he is a good case for abolishing the Department of Energy. We have had one since Jimmy Carter created it after the oil shock, and it does not work very well. It has, I think, hurt the entire process of finding energy. With investors like Solyndra, it is open to charges of corruption.
I think we would be much better off to abolish the Department of Energy and create the right rules and the right approaches.
Now let me give you some examples of what I mean by that. Under President Obama, because he is so anti‑American energy, we have actually had a 40 percent reduction in development of oil offshore, and we have had a 40 percent reduction in the development of oil on federal lands. This is the exact opposite of what we should be doing.
What we should do and what I will do as your president is I will authorized the development of offshore, as long as it is far enough out that it is not visible, and it is not a threat to tourism or the fisheries. And I will authorize the development of federal lands that are appropriate.
And think about this: We own ‑‑ we, the American people, own 86 percent of Nevada. That's an area 40 percent the size of Texas. And mining is the second‑largest employer in Nevada. If the Federal Government were more willing to open up parts of Nevada, we would have a lot more jobs.
We own 69 percent of Alaska. Alaska is, in fact, twice the size of Texas. That means we own one and a half Texases. So you can offer the environmentalist half of Texas, 125,000 square miles.
They can take national parks, polar bear areas, walrus areas, glaciers, an area half the size of Texas.
That would leave us for development for looking for oil, for gas, for coal, for minerals, an area literally the size of Texas that is currently undeveloped.
So when I suggest to you with the new technologies, with the new ability to have very sophisticated seismic exploration to target where the reservoirs of oil and gas are, with the ability to go out and have very sophisticated and efficient methods of going down and finding them, we could have an explosion of new energy, news sources, and new capacity.
There's no reason we cannot set three goals:
- Become energy independent for national security reasons;
- Develop enough new energy here at home that would create well, over a million jobs in the next few years, high‑paying jobs, very useful jobs, jobs which by the way, increase our manufacturing base because much of energy production requires manufacture products in order to both drill, due process, to transport;
- Third, by using federal property and by allowing offshore development on federally controlled waters, we get paid a royalty. One of the leading experts on North Dakota has suggested that we might well have over the next generation 18 trillion, not billion, $18 trillion in royalties that we could gather for the federal government with no tax increases.
And in fact to accelerate that, I propose the following tax changes. I propose we go to zero capital gains tax, so hundreds of billions of dollars pour into the United States to enable us to have new investment, new factories, new exploration, new companies. I suggest a 12 a half percent corporate tax rate would liberate about $700 billion in overseas profits to bring them back home to be reinvested and to allow our companies to compete everywhere in the world. I've also proposed that we abolish the death tax permanently, so that we are in a position where family businesses can focus on job creation and are being successful, not on hiding from the IRS.
I've also proposed that we have 100 percent expensing. And what that means is: When you invest in new equipment, you write it off in one year. Now that is really important because it means if we are going to go out and find new oil, we're going to move the oil with pipelines, we could make it very desirable to develop energy in America and to develop manufacturing in America, so that the energy companies would be buying from American manufacturers. And you would, once again, rebuild our machine tool industry and rebuild our industry that supplies goods and services.
I was in a company that makes forklifts, Xtreme Manufacturing, in Las Vegas, Nevada, and they were looking forward to the Keystone Pipeline because they were building the forklifts in Nevada that were going to be used to build the pipeline. So there are jobs all over the country dating back into this reemergence.
I guarantee you that as your president on the very first day; I will sign an executive order approving the Keystone Pipeline so that oil can come from Canada through the United States to Houston and Galveston.
That way we will have 30 to 50,000 new jobs building the pipeline, and for the next 50 years, we will have people working to maintain the pipeline; we will have people working to process and refine the all products and to ship them out of the ports of Galveston and Houston.
It is a win‑win program. I am dedicated to making sure that the Canadians do not have to have a partnership with China to build a pipeline due west across the Rockies.
I want them to have the less expensive, more effective, and frankly, more pro‑American pipeline that comes right down to Houston and enables us to make money with our Canadian neighbors in a way that is positive for both countries and helps us increase our national security. So these are very practical steps we can take.
A president who is willing to replace the environment protection agency with a brand‑new environmental solutions agency dedicated to common sense, to science and technology, to innovation and to be economically rational.
A president dedicated to opening up offshore so that we can develop the maximum amount of American oil and gas right here at home.
A president willing to use federal land where appropriate, not national parks, not areas of great beauty, but we have millions of acres that we can allow to be developed in a way that will be good for America, good for our economy, good for our national security.
A deliberate strategy to bring down the price of gasoline to $2.50 a gallon or less so that you can afford to buy the kind of car you want.
And remember, once we prove there is no "Peak Oil," once we prove that, in fact, there is a huge volume of energy out there that we can develop if we are willing to do it, there is no reason to have CAFE standards. CAFE Standards were adopted for automobiles as a response to the Arab embargo in the 1970s. But if we're going to produce plenty of energy, let the American people by the car or truck they want.
We don't need this meddlesome Washington bureaucracy and Washington politicians dictating to the rest of us what we should do and how we should live. People, if they go to work and they earn a living and they pay their taxes, when it is their take‑home pay, it ought to be their decision. And they ought to have the freedom to drive what you want to and they ought to have the freedom to enjoy the things they want to enjoy. And they should not be told by some Washington bureaucrat or some Washington politicians what they have to do.
And frankly, if we eliminate the CAFE Standards, all of our auto companies are going to be healthier overnight. The American people replied to bureaucratic meddling by moving from full‑size cars when they were outlawed to trucks. So the effect wasn't to have us go to smaller vehicles, it was just to shift us out of cars into trucks.
And I think we need to understand the American people really are proud about their right to choose the way they want to live without politicians and bureaucrats telling them what to do.
And I will say finally, if we do all of this, the amount of money we are going to generate is going to enable us to move towards a balanced budget, if we control spending, if we modernize the Federal Government, if we adopt anti‑fraud procedures, if we abolish a couple of departments. If we take the Tenth Amendment project that Governor Rick Perry has agreed to head up, and we return power back to state and local government. Those things will enable us to move back toward a balanced budget.
I know this can be done, because when I was Speaker of the House, I worked with President Bill Clinton and passed the 1997 Balanced Budget Act and out of that came four consecutive balanced budgets. We paid off $405 billion in debt.
So when I look at the scale of the Obama deficit, the amount of money he is throwing away, the wasteful use of his credit card, I know that we can do better. And I know that if we open up American energy, think about the things that happen simultaneously.
We get a lot more jobs, that is, people that come off of unemployment, they come off of food stamps, they come off of welfare, they come off of public housing, they come off of Medicaid. All that saves us money. And they go to work taking care of their family and paying taxes. So government revenue goes up, government expenses go down.
Second, I know that when we develop this, the companies are going to make more profit, so they are going to pay more taxes back. And I know that the royalties that we are going to get from federal land and from offshore developments is going to pour in by the billions.
In fact, if the estimates from North Dakota are right, it could literally be pouring in at the rate of $100 billion or more a year of increased royalties without a tax increase. So there are a lot of positive things that can come, all simultaneously.
And finally, as a national security matter, it allows us to say to the all developing dictators, whether they are Venezuela, Saudi Arabia, Iran, you name it, that we are going to be standing on our own two feet. That the United States is not going to bow to anybody, we are not going to be blackmailed by anybody, and as we get to a balanced‑budget, we're going to start paying down our debt, paying off the Chinese held bonds, so that we can become truly once again independent and able to do what we believe in on our terms, without having to deal with the kind of pressure you might get into even if there is somebody holding onto your oil or because they're holding onto your U.S. Treasury notes.
Either one is a form of leverage over us and weakens us.
I believe it is very important that we take advantage of this. But notice what my outline for you. Here is a whole new approach.
It is positive.
It is exciting.
It means you will have more money in your pocket because at $2.50 a gallon, you can figure out for yourself what does that save you annually? And if you are a family that has several cars or several trucks, it saves you a lot. If you are an independent trucker, it saves you a whole lot of money. If you live in a town where trucks are bringing your groceries and they are bringing things to your local mall, you are going to save money.
Every time you can lower the cost of energy, you make it easier for us to have manufacturing and you lower the cost of living. It is a win‑win environment. You also know that if you do this, we have a lot more jobs, and we need a growing economy with a lot of new jobs, because we want to be a country where America works best when Americans are working.
We are not a country of food stamps and welfare. We are a country of the work ethic, of a job, of take‑home pay, of opening up our own business. And this kind of energy program will do just that.
I know it is different. I know a lot of folks in the establishment will say it is "unrealistic."
These are the same people who said to President Reagan when he said, "We can defeat the Soviet empire,"
"Now be reasonable."
These are the same people that when Governor Reagan, President Reagan said ‑‑ first Governor Reagan as candidate, then President Reagan once he won ‑‑ he said, "If we cut taxes, we will create jobs." They said, "That is "voodoo economics." Well, he created 16 million new jobs during his presidency.
I came back really applying the same things in 1994 with the "Contract with America." And people said that is "unrealistic." You are not going to win control of the House. It's not possible. No one has done it in 40 years. You can't balance the budget. You can't reform welfare.
Well, guess what? Because we had positive ideas that were real, we had the largest one‑party increase in American History; 9 million additional votes in 1990 went to the Republican side, a million fewer votes than the Democratic side. We won control for the first time in 40 years and we kept our word. We, in fact, passed welfare reform; two out of three went to work or went to school. Incomes went up. We had fewer children in poverty because their parents were working and have a better future. We passed the largest tax cut, the largest capital gains tax cut in history. Unemployment dropped to 4.2, 11 million new jobs.
And the budget, as I said earlier, was balanced for four straight years. So I believe if you have courage and faith, if you have the right principles and you have the right facts, then you can develop the right policies.
And even if it scares the Washington establishment, even if the Liberals don't like it, even if the New York Times editorial writers say "You can’t do this? How can you have all that new energy? How can you let the American people buy the kind of car they want? How can you lower the price of gasoline to $2.50?"
Well, my answer is: We are Americans. And Americans do what needs to get done. We have a long history of people doing great things together and I believe we can have an energy future together. And I think with that energy future, we're going to have a better quality of life, a better economy, better national security, and take a big step toward balancing the federal budget.
I do need your help. This is a wild campaign. It has been up and down; it's like riding the roller coaster at Space Mountain. And I would love to have you come to Newt.org and sign up and help us.
We need all the folks we can get because if enough Americans come together, we are going to, in fact, create a much better future. And together, let's get America back on the right track. Let's get the economy growing again. Let's make sure that our national security is safe, and let's give our children and grandchildren the kind of fabulous country that our parents worked and fought to give us. Thank you very, very much.