By OGJ editors
HOUSTON, Apr. 5 -- Representatives from the California Independent Petroleum Association (CIPA) met with congressional members and federal officials in Washington, DC, last week to warn against what CIPA calls “the dire effects of higher taxes on domestic production.”
Proposed tax hikes on US oil and natural gas production could reduce new drilling investments by oil companies, CIPA said in its Apr. 4 weekly Monday Morning Report newsletter.
“Consequently, this would increase our dependence on imported foreign oil at a time when the president is calling for more domestic production,” CIPA said of US President Barack Obama’s administration. “Several of the proposals affect small independent producers exclusively.”
Specifically, CIPA argued against eliminating expensing of intangible drilling costs, eliminating the percentage depletion income tax deduction, and extending the geological and geophysical amortization period.
CIPA also is against a proposal to eliminate the manufacturing tax deduction, noting that the oil and gas industry is restricted to a 6% deduction while other industries get a 9% deduction.
In addition to tax issues, CIPA continues to advocate for exploration off California’s coast using 27 platforms already operating in state and federal waters. In addition, CIPA encouraged the federal government to continue funding the Department of Energy–Office of Fossil Energy.