Proposed tax law changes would harm gas consumers too, AGA warns

The Obama administration's proposed oil and gas tax law changes would hurt natural gas consumers as well as producers, the American Gas Association warned on March 4.

The Obama administration's proposed oil and gas tax law changes would hurt natural gas consumers as well as producers, the American Gas Association warned on March 4.

By changing tax laws which address intangible drilling costs, geological and geophysical expenses, percentage depletion and the deduction for US manufacturers, the administration's federal budget proposal would discourage independent producers from discovering and recovering domestic gas, according to AGA, which represents the nation's gas utilities.

"When supply shrinks and can't keep pace with demand, prices must rise. The 171 million Americans who rely on gas to heat their homes and cook their food could see higher energy bills should these provisions pass. That would put an even greater burden on consumers," AGA President David N. Parker said.

The proposals not only would reduce domestic gas supplies but also eliminate many well-paying jobs and create a serious potential for upward price swings, he continued.

"Right now, natural gas utilities are able to deliver clean, domestic natural gas to customers at reasonable prices. With the economy in the doldrums, now is not the time to increase the price of natural gas to consumers," Parker maintained.

Contact Nick Snow at nicks@pennwell.com

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