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News Media Contact:
Nicole Daigle / Jeff Eshelman
202.857.4722 / 800.433.2851
For Immediate Release
February 1, 2010
President’s Attempt to Raise Taxes on Independent Producers Will Result in “Fewer Jobs, Less Revenue” and Greater Foreign Dependence
WASHINGTON - Documents released by the White House today suggest that President Obama will attempt to resurrect a series of punitive tax hikes on U.S. producers of oil and natural gas in his budget plan for 2011 - tax increases that were first proposed last year, but were soundly repudiated by Congress. On the heels of today's announcement, Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA), released the following statement:
"In repudiating the president's attempt last year to impose prohibitive tax policies on those who find and produce energy in America, Congress rightly recognized the important role that small, independent energy producers can play in fueling the short-term recovery and long-term revitalization of our struggling economy. One year later, that role is even more critical and apparent than it was back then. Unfortunately, in his search for 'easy' revenue, the president appears once again to be endorsing a series of tax changes that will result in fewer American jobs, less government revenue, and a tightening of our already dangerous dependence on foreign, unstable energy.
"Contrary to the justifications you'll read in today's budget plan, here are the facts: Virtually no industry in the United States pays more in taxes, royalties and revenues than America's energy producers, and very few industries have the potential to create as many high-wage jobs in our current economic climate as quickly and effectively as we do. And while efforts to impede that work may produce short-sighted budget relief in the near-term, it will result in far less revenue, investment and activity in American resource development in the long-term - precisely the things that we should be promoting moving forward.
"These punitive taxes would reduce investment in new U.S. production by 20 to 40 percent. And, at the same time, it could drive down U.S. oil production by 20 percent and natural gas production by 12 percent; potentially killing thousands of jobs. The good news now, as it was last year, is that the president's latest budget request is just that: a request. And just like last year, IPAA will continue to take its case directly to those in Congress - both Democrats and Republicans - who recognize the value that small, independent American energy producers can deliver if given the opportunity to do it."
NOTE: According to the budgetary document released by the White House this afternoon, the president will call on Congress to impose nearly $40 billion in new and additional taxes on the U.S. energy sector. Among the most onerous of those provisions is the White House attempt to eliminate long existent tax provisions like intangible drilling cost and percentage depletion deductions that would harm the small, independent producers of natural gas and oil.
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IPAA is the national trade association representing oil and natural gas producers that drill 90 percent of the nation's oil and natural gas wells. These companies account for 68 percent of America's oil production and 82 percent of its natural gas production.
