IPAA TO PRESS FOR IMPORT RELIEF

The Independent Petroleum Association of America plans to persist in its campaign for oil import relief from the Clinton administration.

Last December IPAA asked the Commerce Department for relief under Section 232 of the Trade Expansion Act. The plea based on a 1989 Commerce finding that oil imports were threatening U.S. security.

Commerce rejected the bid, saying the new petition could not be based on the 1989 study.

NEW PETITION

George Alcorn, IPAA chairman, says oil associations will file a new petition within 2 weeks, seeking relief from low priced crude imports and a new study. That document could take 1 2 years to prepare.

IPAA's executive committee voted unanimously to proceed with the petition. "We want to challenge the administration about this issue," Alcorn said.

Denise Bode, IPAA president, said import relief does not necessarily mean an oil import fee which appears to be a political impossibility for Congress. She said the administration could grant producers relief through the tax code.

Alcorn said "things are as bad as they've ever been and getting worse" for the U.S. oil industry. "Oil prices may force us to shut in, but they can't force us to shut up."

Independent oil associations sent delegates to Washington last week for the annual lobbying of congressmen.

In contrast with the long laundry lists of years past, IPAA's current demands are short and to the point. It wants:

Congress to approve a tax credit for oil and gas production from new wells, applicable against the alterative minimum tax (AMT).
Geological and geophysical costs to be expensible in the year in which they are incurred.
The current tax credit for enhanced recovery expanded to include investments in secondary and advanced recovery projects and new technologies such as horizontal drilling. It said the credit should be fully creditable against the AMT.
A change in the tax code definition of "independent producers" to allow firms that sell natural gas or gas liquids or operate small refineries to qualify for independents' tax treatment.

Alcorn said in talks with Congressmen, "We also will be talking about (the nation taking) a reasonable approach to environmental regulations and public lands policy."

BOREN ASSISTANCE

Sen. David Boren (D Okla.) has promised to help.

He is writing a bill to increase percentage depletion when prices drop below $20/bbl, increase the maximum depletion allowance, set a floor price on imported oil, and grant a tax credit for stripper wellis. He chairs a tax subcommittee that will conduct hearings on that and other bills.

Boren also will invite other oil state congressmen to a "strategy summit" to explore what can be done. He said the summiteers win ask to meet with President Clinton.

But Boren may not be the administration's favorite senator these days. He was instrumental in defeating Clinton's BTU tax proposal last year (OGJ, June 7, 1993, p. 23).