TAEP: Obama tax proposals would cost Texas economy $20 billion
The total adverse economic impact on Texas alone from the Obama administration’s proposed oil and gas changes would be about $20 billion over the next 4 years, a study by the Texas Alliance of Energy Producers said.
OGJ Washington Editor
WASHINGTON, DC, Sept. 14 -- The total adverse economic impact on Texas alone from the Obama administration’s proposed oil and gas changes would be about $20 billion over the next 4 years, a study by the Texas Alliance of Energy Producers said.
TAEP submitted the study to the US Senate Finance Committee’s Energy, Natural Resources and Infrastructure Subcommittee on Sept. 10 as the subcommittee held a hearing on White House proposals to repeal percentage depletion, intangible drilling costs, and six other significant federal tax provisions. The administration also wants to impose an excise tax on new Gulf of Mexico production.
Repealing the percentage depletion and IDC provisions would hurt independent producers instead of major oil companies, which are not eligible for them, TAEP noted.
The study noted that Texas would lose about 70,000 oil patch workers, because drilling activity would decline to record lows in a matter of months. It said that the Baker Hughes Rig Count for the nation would decline from 999 to 330 and in Texas from 376 to 124.
TAEP’s study estimated that oil and gas production tax revenues in Texas would drop $2.1 billion over the next 3 years as a result of not finding and replacing new reserves. US crude oil imports would increase as the nation spent an additional $551 billion for purchases from foreign suppliers, it said.
It predicted in a statement that if Congress adopted the proposals, the US oil and gas industry would quickly collapse. “The repeal of the tax provisions would be a quick death, while cap-and-trade would be a slower death,” TAEP said.
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