Posted February 6, 2012
Last week, API hosted a blogger conference call to follow up on President Obama’s State of the Union remarks. API Senior Tax Policy Advisor Brian Johnson and Chief Economist John Felmy laid out steps that can move the country beyond pronouncements to energy policies that will help us meet rising global energy demand. From Felmy’s opening statement:
“I know the conventional wisdom in Washington is that you can’t get anything done in an election year. Yet on some key energy issues, the president actually could get a lot accomplished that would advance his call for more American oil and gas.”
So, what can be done this year? The president could approve the Keystone XL pipeline, take steps to reverse declining oil and natural gas activity on federal lands in the West, add more offshore areas to the federal government’s five-year drilling lease plan, restrain the regulatory hand of government and end the call for increased taxes on oil and natural gas companies. With the right policies and leadership, the oil and natural gas industry could produce more jobs, more energy and more revenues to the government.
Increasing taxes on the industry would have the opposite effect. During the call, Johnson provided some clarity to the president’s rhetoric on “taxpayer subsidies”:
“There is clear difference between a credit, a deduction and mechanisms of cost recovery. A credit we would consider a subsidy. A credit subsidizes activity. It takes money from ‘Taxpayer A’ and gives it to ‘Taxpayer B’ for the purposes of completing a policy objective. Our industry does not currently receive one targeted taxpayer credit in the tax code. … We receive the exact same deductions and cost-recovery mechanisms that any other industry does. Our ability to recover labor costs through (intangible drilling costs deduction), which has been in the code since its inception, is no way a loophole or a special giveaway.”
For more information, take a look at the full transcript below.
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.