Energy Today -- February 15, 2011

Oil and Gas Journal: Obama keeps pledge to end oil tax incentives in 2012 budget request: The White House followed through on US President Barack Obama's promise to eliminate oil and gas incentives and preferences with a fiscal 2012 federal budget request that would increase direct taxes on the industry by an estimate $3.472 billion next year and $43.612 billion over 10 years. US producers and refiners operating internationally also would pay an additional $532 million in fiscal 2012 and $10.758 billion during 2012-21 under modified rules for dual-capacity taxpayers under the foreign tax credit. "As the bipartisan fiscal commission concluded, the only way to truly tackle our deficit is to cut excessive spending wherever we find it--in domestic spending, defense spending, and spending through tax breaks and loopholes," Obama said as the White House Office of Management Budget released the proposed budget on Feb. 14. "We've begun to do some of this with $78 billion in cuts in the [US Department of Defense's] budget plan, by ending tax breaks for oil and gas companies, and through billions of dollars in savings from wasteful health spending." Oil and gas industry association leaders immediately condemned the proposed changes. "It's no surprise the administration is proposing yet again to raise taxes on the US oil and gas industry. But it's still a bad idea and comes at one of the worst times in our economic history," American Petroleum Institute Pres. Jack N. Gerard said. "The administration continues to ignore the fact this industry is among the nation's largest job creators and delivers enormous revenues to government at all levels. The industry pays income taxes, royalties and other fees totaling nearly $100 million every day and pays income tax at an effective rate far higher than most other industries."

National Journal Expert Blog: Obama 'Inconceivable' on Energy: The effect of the President's discriminatory proposals would be to further discourage domestic exploration and production and to unnecessarily increase imports. Given the current unrest in the Middle East, he should be looking at actions that would stimulate domestic oil production to offset imports. With a rational energy policy, the US could easily be on the road to producing somewhere around 2 million barrels a day more than we currently do...The second effect is to make international companies like Chevron, Conoco-Phillips, Exxon Mobil, Marathon, and others less competitive in the global search for oil. This is a gift to the Chinese, Russians, Iranians, and Venezuelans, among others -- all nations that have government-supported state-run oil companies which our firms compete against in the search for energy to meet the world's need. What has never been a level playing field for U.S. companies would become even more uneven under the President's tax proposal.

Oil and Gas Journal: API: Congress, not EPA, should direct GHG policy: Congress should direct US policy on greenhouse gas emissions rather than the Environmental Protection Agency, American Petroleum Institute spokesmen told reporters during a Feb. 4 conference call from Washington, DC. Khary Cauthen, API director of federal relations, said he sees growing, bipartisan sentiment among congressional members that EPA needs to be stopped from regulating GHG emissions under the Clean Air Act. For instance, Cauthen said CAA never was intended to regulate stationary source GHG emissions. Previously, API has asked EPA officials to reconsider using New Source Performance Standards (NSPS) under the CAA to set GHG standards. Cauthen said API is concerned that "overly burdensome regulations" could hinder companies from creating jobs and spurring the nation's economic growth. Howard Feldman, API director of regulatory and scientific affairs, said EPA should finalize NSPS that remain under development before setting new GHG standards.

The Hill: White House budget proposal cuts funding for EPA, but GOP wants more