The People of America's Oil and Natural Gas Indusry

Energy Today - May 6, 2011

Rayola Dougher

Rayola Dougher
Posted May 6, 2011

Shopfloor: House Overwhelmingly Backs Offshore Oil, Gas Development:The House of Representatives this afternoon voted 266-149 to pass H.R. 1230, the Restarting American Offshore Leasing Now Act. That's a huge bipartisan level of support for the bill, which directs the Secretary of Interior to move ahead with previously scheduled offshore oil and gas leases. The overwhelming support came despite the White House issuing a formal Statement of Administration policy opposing H.R. 1230 and H.R. 1229, the Putting the Gulf of Mexico Back to Work Act. Townhall: Politics Cloud Common Sense on Energy: Also at stake in this debate is the health of our domestic economy. Not only does the industry support 9.2 million American jobs, affordable energy is key to productivity gains for numerous goods and services. It likewise feeds approximately $100 million daily into federal and state government coffers through lease payments, royalties, and other taxes. Ironically, allowing this activity to grow provides a better long-term prospect for deficit reduction than taxing it into non-competitiveness. And there are other lesser-known benefits. A study into specific state pension plans to support the retirement of our nurses, teachers, fire fighters, and other public servants revealed that 3 to 5 percent of the assets were in oil and gas, earning between 9 and 12 percent returns while other types of investments were tanking. With state pension plans facing a $1.26 trillion cumulative shortfall as of the end of 2009, taxpayers would only be further imperiled if tax-hikes undercut the performance of energy companies.

Investors' Business Daily: Punishing Big Oil Won't Cut Prices: The ability to expense intangible drilling costs (enacted in 1916), for example, isn't any different from the tax breaks other companies get for R&D. And the "percentage depletion allowance" (enacted in 1926) doesn't even benefit Big Oil, but independent producers, and isn't just for the oil industry but all other "extractive industries." These two breaks, along with the Job Creation Act's domestic production deduction, constitute almost the entire $4 billion in annual "subsidies" Democrats are targeting. It's also worth pointing out, since Democrats and their friends in the mainstream press won't, that Big Oil is already a Big Taxpayer. According to research from the Tax Foundation, the industry paid $26 billion in corporate income taxes in 2008, and accounted for almost $92 billion in government revenues when you combine income, excise and other levies.

Daily Caller: The EPA Shouldn't Regulate Greenhouse Gas Emissions: At a time when jobs and growth are the top national priorities, it would be a shame to take a strong step backward by using the EPA to impose a draconian regulatory regime...Any move to control GHG emissions should come from legislative action passed by Congress. The EPA might have the tools to implement an efficient, pro-market approach, but it has displayed no desire to do so. Instead, it is content to hamstring economic performance in pursuit of its policy aims, and unlike Congress it cannot be held accountable for its policy failures. One agency with that much authority is simply bad for business at a time we should be encouraging growth and development. The EPA should keep its hands off GHGs, and thus keep its hands off badly needed jobs.

Additional Resource:

Yahoo: ND Surpasses $100M for Monthly Oil Tax Collection

Businessweek: W. Va. Begins Look at Marcellus Offshoot Project

The Daily News: Marcellus Development Offers Great Benefits

ABOUT THE AUTHOR

Rayola Dougher is senior economist at The American Petroleum Institute (API), where she analyzes information, manages projects and develops briefing materials on energy markets and oil industry policy issues. She is the author or co-author of economic research studies covering a diverse range of topics including crude oil and petroleum product markets, gasoline taxes, energy conservation and competition in retail markets. In addition to testifying before federal and state legislators, she has participated in numerous newspaper, radio and television interviews on a wide range of issues affecting the oil industry, including crude oil and gasoline prices, industry taxes and earnings, exploration and production, and refining and marketing topics.

Prior to joining API, Rayola worked at the Institute for Energy Analysis where her research focused on carbon dioxide related issues and international energy demand and supply forecasts. Rayola holds a Masters degree in Economic Development and East Asian studies from the American University and a degree in History and Political Science from the State University of New York at Brockport.