Sen. Landrieu Critical of Effort to Increase Oil and Gas Taxes.
Press Release from Senator Mary Landrieu. Comment at our forum.
FOR IMMEDIATE RELEASE
Landrieu Critical of Effort to Increase Oil and Gas Taxes in Administration’s 2011 Budget
WASHINGTON — United States Senator Mary L. Landrieu, D-La., today stated her strong opposition to President Barack Obama’s Fiscal Year 2011 federal budget proposal to increase taxes on oil and gas producers. These tax preferences have been in place since the early 1900s.
Sen. Landrieu joined with a bipartisan group of Senators to successfully remove similar oil and gas tax increases from last year’s budget.
“It is unfortunate that the Administration has chosen to escalate the cost of producing energy in America,” said Sen. Landrieu. “American energy is already being displaced by cheaper foreign energy from OPEC nations, Russia and Africa. Raising the costs of domestically produced energy only accelerates our dependence on lower-cost foreign oil.
“To transition to a low-carbon energy future, we should be increasing our domestic energy production, while at the same time investing in the alternative fuels and advanced batteries that will power our cars in the future. Unfortunately, the Administration’s proposals would reduce not only American oil production but also American natural gas production. With 50 percent less emissions than coal, natural gas should serve as the bridge to our low-carbon future. But this budget proposal could blow up that bridge.”
The Administration estimates that it would raise $36.536 billion over 10 years by reducing oil and gas preferences in this year’s budget. Just over half of these cuts come from the elimination of two accounting practices that have been in place since the first two decades of the 1900s — the Percentage Depletion of Oil and Gas Wells, and the Expensing of Intangible Drilling Costs.
“The elimination of these two accounting procedures would overwhelmingly impact smaller independent oil and gas explorers, not Big Oil,” said Sen. Landrieu. “This will reduce the percentage of oil and gas that is produced domestically without having any impact on how much energy America consumes. The result would be putting thousands more Americans out of work at a time when we should be creating, not eliminating, jobs. That is poor policy.”
The proposed tax changes in the President’s 2011 Budget request would disproportionately impact independent oil and gas companies, which form the backbone of domestic oil and gas production in the U.S. America’s independent producers drill 90 percent of domestic wells, and produce 82 percent of U.S. natural gas and 68 percent of U.S. oil.