NGSA, IPAMS officials urge Obama not to overlook natural gas

Two more oil and gas association officials said they hoped President Barack Obama’s Jan. 27 State of the Union message reflects policies that encourage—instead of discourage—US natural gas development.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 27 -- Two more oil and gas association officials said they hoped President Barack Obama’s Jan. 27 State of the Union message reflects policies that encourage—instead of discourage—US natural gas development.

“We urge the president to remember that natural gas is not only an environmental solution, it is an economic solution for our country,” Natural Gas Supply Association Pres. R. Skip Horvath said in a statement.

The industry employs several million people already and is posed to add more as power plants, homes, businesses, and factories increase demand, Horvath noted, adding, “Those jobs create revenue in addition to the billions of dollars the natural gas industry already generates for state and federal government through royalties and taxes.”

Marc W. Smith, executive director for the Independent Petroleum Association of Mountain States, expressed concern that the White House might respond to a $1.35 trillion deficit with the same $80 billion in tax hikes it proposed last year. “These punitive policy proposals are contrary to the president’s goals of rebuilding our economy, increasing energy security, and lowering greenhouse gas emissions,” Smith said.

The anticipated tax proposals would repeal expensing of intangible drilling costs and the percentage depletion deduction, and reduce expensing of geological and geophysical costs, Smith said.

G&G costs are similar to research and development costs, which are deductible for every other industry, Smith said, adding, “Because of American ingenuity and advanced technologies, the American natural gas industry has increased gas reserves by 39% in the last 3 years, catapulting the US into sixth place in world rankings. America has also surpassed Russia in terms of gas production because of superior R&D and better application of technology.”

Horvath said the US should tap all energy sources, including fossil fuels, to make the domestic economy grow. “Natural gas adds to the reliability of solar and wind and, like solar and wind, it is a sustainable and responsible choice on its own,” he said, adding, “We urge President Obama to recognize [its] potential to contribute to the nation’s economic recovery, job growth, and overall energy security.”

Contact Nick Snow at nicks@pennwell.com.

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