Fourteen US oil and gas association executives jointly expressed concerns about federal tax reform proposals US Sen. Finance Committee Chairman Max Baucus (D-Mont.) outlined in a cost recovery and tax accounting draft (OGJ Online, Nov. 22, 2013).
“Our concern is that the proposals in your discussion draft, such as extending the period during which businesses can recover their operating or labor costs—as in the case of drilling expenses—will take cash away from capital-intensive businesses like ours and significantly reduce future domestic investment,” American Petroleum Institute Pres. Jack N. Gerard and 13 other association executives said in their Dec. 13 letter.
“In addition, proposals to extend depreciable lives and eliminate valid, long-standing accounting methods, like [last in-first out], will also significantly hurt energy businesses seeking to grow and invest in new capital projects,” they told Baucus.
The US oil and gas industry provided one of the few bright spots during the recent domestic economic downturn, and is poised to make even greater investments across the country, the letter continued. “We must have a tax code that not only encourages growth in such investments, but allows us to continue our track record of creating jobs, growing the economy, and strengthening our energy security,” it said.
Top officials from the Independent Petroleum Association of America, American Fuel & Petrochemical Manufacturers, National Ocean Industries Association, Natural Gas Supply Association, American Exploration & Production Council, America’s Natural Gas Alliance, Petroleum Equipment Suppliers Association, Petroleum Marketers Association of America, Society of Independent Gasoline Marketers of America, National Association of Convenience Stores, US Oil & Gas Association, Energy Equipment & Infrastructure Alliance, and Association of Energy Service Companies also signed the letter.
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