There are several energy proposals before the US Congress to be debated in 2014. Most of the proposals center on the discussion of tax reform. Therefore, there is the focus on raising revenues.
For example, US Senator Max Baucus has drafted a proposal to essentially raise taxes on oil and gas producers through the elimination of percentage depletion and the repealing of intangible drilling costs deductions. The Baucus proposal has intangible drilling costs being amortized over five years.
Currently, tax policy for the oil and gas industry is much like US manufacturing companies. The companies are allowed to deduct business expenses therefore providing incentive for investment.
The oil and gas industry is highly concerned about the negative impact that such provisions would have on production and US economic development.
According to the Kansas Independent Petroleum Association, “recent studies show that repealing percentage depletion and IDCs would result in fewer wells drilled, fewer Americans employed, and less energy produced here in the US. This impact is both significant and immediate. According to studies, over 190,000 Americans would be unemployed within one year if percentage depletion and IDCs were repealed; growing to 265,000 jobs lost over a decade.”
Definitely, not a great scenario especially when America’s energy and manufacturing sectors have been moving positively forward.
In Texas, Townes Pressler, Chairman of the Texas Alliance of Energy Producers, states, “percentage depletion and expensing of intangible drilling costs have been key provisions in the tax code that allowed independent oil and gas producers to finance the technological developments that the industry is using to unleash record amounts of domestic crude oil and natural gas in Texas and the US”.
The private and public sectors should work together. Since I entered the energy business in 1977, the industry has continually been forced to defend itself. For example, in 1985 I testified before the US Senate and Natural Resources Committee on the potentially devastating effects that proposed regulations at that time would have on the oil and gas industry in Oklahoma, in terms of job loss and reductions in drilling expenditures, at a time when this vital industry most need support.
American oil and gas companies have a history of being major contributors to their communities by providing funds for local schools, hospitals, and charities. To achieve energy independence, the American people must rally behind these companies and recognize the essential role they play in powering our lives 24-7 at home and work.
It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!
Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort. Facebook: America Needs America’s Energy with over 9000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!