Energy Bill Will Discourage Refinery Investments -- API

The American Petroleum Institute on Tuesday issued the following statement regarding House bill HR 6, the "CLEAN Energy Act of 2007," that would increase taxes on U.S. oil and natural gas companies:

"HR 6 would be a step backward for U.S. energy security. Imposing taxes on the U.S. oil and natural gas industry is contrary to the goal of providing stable and cost-effective supplies of energy for American consumers and discourages the tremendous capital investments needed to meet the nation's growing energy needs.

"Repeal of these tax provisions designed to encourage investment in the United States will discourage new domestic oil production and refinery investments, threaten American jobs, and make it less economic to produce domestic energy resources – thereby increasing our dependence on imported crude oil and gasoline.

"Higher taxes are a cost of doing business and generally result in either higher prices for consumers or reduced earnings for investors. Millions of hard-working Americans have a stake in the success of U.S. oil and natural gas companies through their stock ownership. Americans with retirement or pension accounts, including many state and local pension fund participants, hold 41 percent of the shares of U.S. oil and gas companies.

"Another provision of HR 6 would affect the current deep water royalty relief program, which is an important component in encouraging domestic energy production. HR 6 could very well set back the significant gains in oil and gas production that are attributable to the deep water royalty relief program.

"When it comes to individual leases, a company's decision to amend lease terms is one only the company can make. Companies may choose to voluntarily amend existing leases where appropriate. However, unilaterally forcing changes to existing government contracts through legislation such as HR 6 sets a very bad precedent for the nation and infringes upon the bedrock principle of the sanctity of contracts."