Protests against Obama tax proposals will be long and loud
IPAA President Barry Russell's Mar. 17 letter to President Barack H. Obama was only part of independent producers' protests against the administration's oil and gas tax proposals.
The opportunity was too tempting to resist. After US President Barack H. Obama hosted a small business roundtable at the White House on Mar. 16, Independent Petroleum Association of America President Barry Russell reminded him that independent producers are small businesses too.
"The median number of full-time employees at these oil and gas exploration and production companies is 12, and these companies have been reinvesting 150% of their cash flow back into the development of new technology aimed at finding and producing more energy from fewer wells," Russell said on Mar. 17.
"As the president moves forward on an aggressive plan to support and promote small businesses through new federal grants and significant loan guarantees, all we're asking for is a level playing field on which to continue our critical work," he continued.
Unfortunately, the Obama administration's proposed federal budget for fiscal 2010 targets US oil and gas producers with billions of dollars in new taxes and compliance costs, Russell said. "At a time of unprecedented insecurity, with millions of Americans out of work, a more prudent approach would be one that supports all of America's small businesses," he said.
Eight key provisions
In a Mar. 17 letter to Obama, IPAA's president said that the budget proposed eliminations of eight key tax provisions which aid smaller US producers. "Taken together, these tax changes would strip more than $25 billion from U.S. natural gas and oil production investment (money spent here at home) and would mostly hurt independent oil and natural gas producers," he said.
"This budget would cripple America's independent producers and negate any such improvement that might be seen from the announcement you made yesterday," Russell told Obama.
Independent producers and their associations had already responded quickly to the administration's oil and gas tax proposals. IPAA held its 2009 Washington Call-Up the week of Mar. 2-6 as more than 30 of its members came to the nation's capital to meet with federal lawmakers and their staffs. The previously scheduled event came less than a week after the White House announced its proposed fiscal 2010 budget.
Other issues too
The oil and gas tax changes in it were the primary topic, but IPAA officers and members also discussed environmental regulations, access to capital and to resources, and permitting issues, the association said.
Several regional independent producers' associations joined the IPAA call-up, including the Texas Independent Producers and Royalty Owners, the Independent Petroleum Association of Mountain States, the Oklahoma Independent Petroleum Association, the Panhandle Producers and Royalty Association, the Texas Alliance of Energy Producers and the California Independent Petroleum Association. IPAMS members will be back for their association's call-up April 1-2, and CIPA members will be in Washington April 20-22 for theirs.
A proposed federal budget can take months to move through Congress under ordinary circumstances. This one will take longer because it's so ambitious and complex.
US independent producers wasted no time in speaking out because several provisions seriously threaten their businesses. They've taken the first steps in what will be a long haul.
Contact Nick Snow at firstname.lastname@example.org