Jun 3, 2010 President Obama’s Plan to Increase Taxes, Initiate Drilling Moratoria on American Energy Production Will Kill Jobs, Deepen Foreign Dependence
President Obama’s Plan to Increase Taxes, Initiate Drilling Moratoria on American Energy Production Will Kill Jobs, Deepen Foreign Dependence
“[S]eems like the worst option for the President to choose at this time,” says Independent Petroleum Association of America
WASHINGTON – This week, President Obama reinforced his pledge to levy billions of dollars in new taxes on American oil and natural gas producers. The president’s Fiscal Year 2011 budget calls for new taxes on America’s energy producers – taxes that would increase government revenue by almost $40 billion. These taxes could ultimately force smaller, independent producers – who are responsible for drilling 90 percent of the nation’s wells and on average employ only 12 workers – out of business, costing jobs and deepening our dependence on foreign sources of energy. Additionally, the Administration announced recently a deepwater exploration moratoria – a move that will also decrease American energy production, jobs and federal and state revenues.
In response to the president’s remarks, Barry Russell – president and CEO of the Independent Petroleum Association of America (IPAA) – issued the following statement:
“The president’s call yesterday for billions of dollars in new taxes on American oil and natural gas producers is not new, and is not good energy or economic policy. While many reports characterize this initiative as taxing Big Oil, it is not. Regrettably, this Administration continues to fail to recognize that this enormous tax burden would hit America’s small, independent producers especially hard. The combination of increased taxes and halting offshore exploration seems like the worst option for the President to choose at this time. Our policies should encourage responsible, American energy production, not shutting down the industry altogether.
“Purposefully conflating the need to ensure that companies are responsible for funding environmental clean-ups in the case of a spill – which the House of Representatives has already acted upon by increasing the taxes directed to the federal Oil Spill Liability Trust Fund – as a reason to hike taxes on American independent producers is wholly inappropriate.
“Those responsible for the tragic incident in the Gulf will be held accountable. But we cannot afford to lose sight of the fact that billions of dollars in new taxes on America’s independent producers will kill jobs at a time when they’re most needed, and compromise our long-term energy security. These misguided and potentially devastating tax hikes and moratoria will only ensure that our nation’s dependence on unstable regions of the world to fuel our economy will compound, and that the supplies of energy that the American people rely on will become far less stable.”
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.