Posted May 31, 2011
Myths can be stubborn - sometimes more stubborn than the facts themselves. Tax treatment of the oil and natural gas industry is Exhibit A.
API Tax Policy Manager Stephen Comstock set the record straight after an Ogden (Utah) Standard-Examiner editorial failed to recognize that oil and natural gas companies are taxed at a higher effective rate than other companies, paying more than their fair share of taxes.
"You're way off base suggesting the nation's major oil and natural gas companies don't already pay their fair share of taxes. ... They pay millions of dollars a day in income taxes at higher effective rates than most other companies. They also receive none of the grants, guaranteed loans and price supports provided to other industries."
"Recent legislation to eliminate the oil depletion allowance would've added nothing to the U.S. Treasury because the targeted companies don't qualify for that provision. Also, ethanol credits weren't in the legislation. That leaves the other provisions, which, as you state, 'are in keeping with the deductions all business are allowed. Our industry contributes an average of $87 million a day to the federal government. With their 41% effective tax rate, higher than for most businesses, oil companies pay more than their fair share."
A couple other related points that bear repeating: Raising taxes on energy providers won't bring more energy to U.S. consumers or help create more U.S. jobs. Opening access to energy sources in the Gulf of Mexico and off the coasts of Alaska and Virginia will help do both - more than 4 million barrels of oil equivalent a day and more than 530,000 jobs.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.