As with most of these things, the answer is not simple. The US government provides tax incentives to different industries to promote certain behavior. Back in the 70's and earlier when the government controlled the price of oil and natural gas, the economics for drilling were not attractive. The tax incentives were a way for the government to encourage people to look for more oil and gas by drilling. Drilling for oil and gas is still a risky business, and you would probably be surprised to find out that most of the new wells drilled in the US are drilled by smaller companies, not the major oil companies. The majors get most of their production from overseas. It has been the work of small companies that took the risks to find the shale plays that have brought the majors back. And the small companies need all the help they can get to attract capital to drill. Investors like Wall Street and the hedge funds compare the risk/rewards for different opportunities, and if there are less potential rewards from drilling, they will invest their money on other things. A full discussion of this topic is way outside the limits of what we can do here, but a reduction in the potential rewards from drilling means fewer wells will be drilled, so there will be less domestic production, less jobs, etc etc etc. The countries that sell us oil are laughing all the way to the bank.
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