Oil Industry Urges Debt Committee to Keep Tax Breaks
WASHINGTON (Dow Jones Newswires), Sep. 15, 2011
The oil and gas industry pushed back Thursday against President Barack Obama's proposals to pay for part of his $447 billion jobs plan by ending some tax breaks for energy companies.
Officials from the American Petroleum Institute, the oil and gas industry's main lobbying group, are working to convince members of the Congressional deficit-reduction committee that raising taxes on oil and gas companies might initially bring in additional government revenues, but would cost the industry jobs and profits over a longer period of time.
While higher taxes might generate more revenue for the government in their first five years, future projects might not get the green light under a new tax system, causing the industry to become less profitable, said Kyle Isakower, the organization's vice president of policy analysis.
The trade group estimated that raising oil and natural gas taxes would cost the industry 22,000 jobs and $223 billion in government revenue by 2030.
The organization has sent letters and requested in-person meetings with the 12 lawmakers on the Joint Select Committee on Deficit Reduction, and launched new grass-roots efforts and advertising campaigns, including in the home states of some deficit committee members, said Marty Durbin, API executive vice president.
Under the deal reached to raise the debt ceiling this summer, the bipartisan panel must find at least $1.2 trillion in deficit reductions over 10 years or automatic spending cuts are triggered.
The committee should not single out the oil and gas industry to pay for winnowing the federal budget deficit, Durbin said.
"We are more than happy to be part of the broader tax reform in which all of these provisions will be on the table," he said. "We shouldn't be singled out in a punitive way for the standard tax provisions we have for our business."
On Monday, Obama proposed paying for his jobs-creation bill by ending about $467 billion worth of tax breaks over 10 years for oil and gas companies, people making over $200,000, and hedge-fund managers.
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