Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Sept. 15 -- Nearly two thirds of America’s voters oppose raising taxes on the oil and gas industry in the US and believe it could destroy jobs, the American Petroleum Institute announced on Sept. 14. API said a telephone survey it commissioned by Harris Interactive found that 62% of the respondents opposed increasing oil and gas taxes, and 60% said it could cost the nation jobs.
“Voters fear that raising taxes on an industry that provides most of their energy and supports more than 9.2 million jobs would hurt them and damage the economy,” said API Pres. Jack N. Gerard. “They think it could cost jobs, and that’s exactly what two recent studies show.”
Gerard noted that based on a Wood Mackenzie analysis in August of production impacts from eliminating the manufacturing and intangible drilling cost tax deductions for the oil and natural gas industry, API calculated 58,800 jobs would be put at risk in 2011 and 165,000 in 2020.
A separate study of the impacts of ending the manufacturing tax deduction and increasing taxes on the industry’s foreign-earned income by Louisiana State University finance professor Joseph R. Mason concluded that 154,000 jobs could be lost in 2011, Gerard said.
Mason’s study, which was released on Sept. 13 by the American Energy Alliance, an Institute for Energy Research affiliate, also indicated that excluding the oil and gas industry from the manufacturers’ tax deduction and repealing dual capacity foreign tax credits would reduce US economic output by $341.3 billion, tax revenue by $83.5 billion, and workers’ wages by $67.8 billion between 2011 and 2020.
Aids foreign competitors
“Double taxing US businesses would help foreign competitors, including BP and several national oil companies,” Mason said during a Sept. 13 Capitol Hill briefing sponsored by the Natural Gas Supply Association. “China, by the way, has just received permission to drill offshore Cuba in tracts closer to Florida than what the US government proposed.”
Removing excess regulatory restrictions and leasing more of the US Outer Continental Shelf would stimulate domestic economic growth more than increasing oil and gas industry taxes, he maintained. “Drilling more of the OCS is being vilified in the wake of the Deepwater Horizon accident and the financial crisis—in my opinion, needlessly,” Mason said.
At a Sept. 14 press teleconference, Gerard said that more than 8,500 people attended seven rallies in five states which API held in the past few weeks. “The speakers were local. Discussion about jobs and energy policy was the main message,” he said. “We are helping people who attended the rallies makes their views known on jobs and energy issues to their representatives in government. Now that we’re back in Washington, we are going to keep the rally energy growing and plan to mobilize even more people as a part of our expanding grassroots network.”
Since many who may be concerned about higher oil and gas taxes and their economic impacts could not attend an API rally, Gerard said that the trade association will launch one online, “a virtual meeting space for our energy advocates,” on Sept. 20. “Rally-goers will be able to send a message to Congress and have their voices heard,” he said.
The US oil and gas industry is one of the biggest US taxpayers, according to API. It said that the US Energy Information Administration calculated that the industry paid almost $100 billion in federal income taxes in 2008, the latest year for which data is available. A review of Compustat data shows that the industry had a 48.4% effective average tax rate in 2009, compared with 28.1% for the rest of the companies in Standard & Poor’s industrial index, API said.
Contact Nick Snow at [email protected].
File photo from PDVSA..
