oil and gas industry Archives - Shopfloor

Tax Policy Goes a Long Way Toward Defining Energy Policy

By | Energy, Taxation | No Comments

Dorothy Coleman, the NAM’s Vice President of Tax and Domestic Economic Policy, brought manufacturers’ support of pro-growth tax reform to a panel discussion, hosted by Politico today, which featured a variety of policy officials in Washington, D.C. talking about the impact of tax policy in the energy sector.

As consumers of one-third of our nation’s energy, manufacturers have a lot at stake when it comes to tax and energy policy. The conversation touched on a wide variety of topics but it was clear that a need for pro-growth tax policy that doesn’t pick winners and losers is a fundamental aspect of reforms. We want to ensure that the U.S. is the best place in the world to manufacture and raising taxes on energy companies, who require massive capital investment to develop resources, will only undermine that goal.

Some of the panelists suggested the implementation of a carbon tax as potential reform, but Mrs. Coleman quickly refuted those calls, saying that the revenue gains were far outweighed by the economic devastation that would ensue – loss of jobs, wages, higher prices and a less competitive America.

Panel discussions like the one held today help shape the way tax reform is done – and just like today, the NAM will remain at the center of the conversation.

White House Offers Tired Rhetoric, Tax Increases to Solve Sequester

By | Taxation | No Comments

Surprise, surprise. In a shocking turn of events today, the White House has again used energy companies as their boogey-man to raise taxes and shift blame on the sequester. I would say they dusted it off, but they drag out energy companies so often, this particular boogey-man doesn’t have time to gather dust.

Yet in using this tired line of attack again, they don’t offer any concept to how capital-intensive the energy production industry is – and what significant steps energy companies face in delivering resources to the market.

Respected accounts of how the sequester was conceived and implemented credit the President with the idea of across-the-board spending cuts, largely aimed at the defense sector. Now, as the Administration has finally caught up with the reality the NAM warned of for months – a crushing blow to the U.S. economy – they’re trying to play the blame game.

The “solution” the Administration has offered is predictable – more tax hikes, more picking winners and losers through punitive tax policies, and absolutely no effort to address the true drivers of our debt, runaway entitlement programs. Tax increases won’t do anything to protect the jobs of more than a million Americans – in fact, it will just put more in jeopardy.

The Administration says that the sequester is bad policy – we agree. What I can’t understand is why they would choose gasoline as their weapon of choice when fighting a fire. I’m sure that focus groups responded to the corporate jet and energy company attacks. But that doesn’t excuse substituting politics for sound policy.

Administration’s “Public Enemy” Delivers Job Growth

By | Economy | No Comments

The Administration spent much of today on its heels, attempting to downplay another disappointing jobs report. It’s a reality check and, to put it mildly, this reality is bad news for America. The job market is so depressed that 368,000 people have stopped looking for work. And what’s even more incredible, the government doesn’t even count them among the unemployed.

Yet there was at least one bright spot. The “go-to” public enemy for the Administration, the oil and gas industry, was one of the only sectors that prevented the White House from having to explain a total disaster of an jobs report. Consistently (and unfairly) dragged through the mud by those would like to cripple the industry, oil and gas provided 1,100 new jobs last month.

Imagine what they could do if Washington could put together a pro-growth agenda that focus on creating a positive environment for all businesses rather than attempting to demonize certain job creators to promote their own agenda.

Senate Rejects Energy Tax Hikes

By | Energy, Taxation | No Comments

Today the Senate rejected S. 2204, a bill to raise taxes on energy companies by more than $35 billion.  The NAM has weighed in strongly against the legislation and it was voted down by a vote of 51-47. Manufacturers know that these tax hikes would deal a devastating blow to energy companies in the U.S. pursuing resources critical to our nation’s energy security as well as saddle everyone with higher costs.

This proposal – and others like it – will only distance the U.S. from our goal of energy policy that will increase supply and lower costs and should be voted down. It’s another strike against manufacturers, consumers of one-third of our nation’s energy, who already face a 20 percent cost disadvantage with their foreign competitors. If we seek to truly achieve energy independence, lower costs and improved competitiveness around the globe we must avoid a policy of picking winners and losers through punitive taxes.

Dispite the bill’s defeat today, there are still a number of people, including President Obama, that still wish to hang an albatross around the necks of energy companies in the U.S. with new taxes.  The NAM is committed to fighting this unfair effort and manufacturers will continue to support and work towards an “all of the above” energy policy that will deliver for consumers and our economy.

On Earnings, Profits and Taxes, ExxonMobil Lays It All Out

By | Economy, Energy, General, Taxation | 3 Comments

Huzzah for ExxonMobil’s Ken Cohen, vice president of public and government affairs, for using the excellent “Perspectives” blog to lay out the details and context that rightfully belong with the company’s announcement of $10.7 billion in earnings for the first quarter of 2011.

From “ExxonMobil’s earnings: The real story you won’t hear in Washington“:

ExxonMobil’s earnings are from operations in more than 100 countries around the world. During the first quarter, more than three-quarters of our operating earnings came from outside of the United States.

The part of ExxonMobil’s business that refines and sells gasoline, diesel and other products in the United States represents less than 6 percent – or 6 cents on the dollar – of our earnings.

Why so little? Because we actually buy more crude oil to refine into gasoline and diesel in the U.S. than we produce ourselves. And these purchases are made on the open market at the prevailing rates.

During the first three months of this year, for every gallon of gasoline and other products we refined and sold in the United States, we earned about 7 cents. Compare that to the 40 to 60 cents per gallon that went from gasoline consumers to the government (state and federal) in gasoline taxes.

Rising gas prices do indeed have an impact on consumers, families and businesses, Cohen writes before explaining the primary causes of the increase: Read More

On Oil, Instead of Raising Costs Through Taxes, Increase Supply

By | Energy, Taxation | No Comments

Jay Timmons, president and CEO of the National Association of Manufacturers, issued a statement in response to President Obama’s letter to Congress calling for higher taxes on domestic oil and gas production. Excerpt:

That misguided policy would result in more inflation, higher prices at the pump for already beleaguered Americans, and increased costs for products consumers need and use every day.Manufacturers support efforts to increase the use of clean energy sources and are helping to lead the way in meeting future energy demands with new energy sources. Until those alternative sources are cost-competitive with oil and gas and sufficient to meet this country’s demand for energy, manufacturers believe the United States should expand access to domestic energy by opening additional areas of the country – offshore and onshore – to exploration and development.

Timmons concluded: “President Obama wants to raise taxes on energy companies and, at the same time, reduce the cost of gasoline. He can’t have it both ways.”

John Felmy, chief economist of the American Petroleum Institute, had several pithy comments for the reporters. From USA Today, “Obama, Republicans tangle over oil subsidies“:

This is a proposal born of desperation that would do nothing to reduce gasoline prices,” said American Petroleum Institute chief economist John Felmy. “It would reduce investment in new oil and natural gas projects, cost new jobs and decrease oil and natural gas production.” Read More

President Obama: Eliminate Oil Subsidies (That Don’t Really Exist)

By | Energy, Taxation | 3 Comments

President Obama has made criticisms of the U.S. energy industry a feature in his recent public appearances, especially the campaign fundraisers, and today he elevated the political misdirection with a “Letter from the President to Congressional Leadership Regarding Oil Subsidies.”

While there is no silver bullet to address rising gas prices in the short term, there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.   One of those steps is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil. Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsized profits this quarter.

We must raise taxes on domestic oil and gas production in order to reduce our dependence on foreign oil! Is that really a serious argument?

No. No it’s not. Just as the President’s repeated attacks about “subsidies” and “tax breaks” for Big Oil are not serious arguments.

The American Petroleum Institute explains the realities of energy taxation in the United States in this fact sheet. Good to actually see some actual facts in this important policy debate.

The U.S. oil and natural gas industry does not receive “subsidized” payments from the government to produce oil and gas. However, there are many provisions in the tax code that allow companies to recover their costs. The oil and gas industry are eligible for these deductions, which are similar to, if not the same as, deductions available to many other industries.

Tax deductions should in no way be confused with subsidies. A fundamental pillar of the U.S. income tax system is that businesses are taxed only on net income. This means that there needs to be some practical and fair method for businesses to recover costs. The policies underlying cost recovery provisions in the tax code legitimately utilized by the oil and natural gas industry are no different than those for any other industry, and are necessary to insure that our industry is treated no differently than any other. Read More

More Jobs, Not Higher Energy Taxes

By | Energy, General, Taxation | No Comments

The National Association of Manufacturers today began TV and radio advertising in nine states to oppose tax increases on energy production, which some members of Congress want to enact when they reconvene in Washington next week.

In a statement, NAM President and CEO John Engler said: “Our message to Congress is very clear. At a time when unemployment remains over 9 percent, costly energy taxes will make our nation’s economic situation worse by raising costs for businesses and consumers and hurting businesses’ ability to compete in a global marketplace. We are encouraging manufacturers, small businesses and the public to tell Congress to say yes to jobs and no to higher energy taxes.”

The National Federation of Independent Business is joining the NAM in sponsoring the ads. Thank you, NFIB!

Television and radio spots will run in Arkansas, Colorado, Indiana, Maine, Missouri, Nevada, Ohio, Virginia and West Virginia. The spots urge Senators in the states to, “Say yes to jobs, and no to higher energy taxes.”

The Wall Street Journal’s John D. MacKinnon has blogged on the new campaign, “Business Groups Target Higher Energy Taxes.”

We’ll Create Jobs by Raising Taxes on Energy

By | Energy, Taxation | No Comments

From The Washington Examiner, “Some Hill Dems cringe at Obama’s $50 billion spending plan”:

Sen. Mary Landrieu, D-La., who is at odds with the Obama administration over its decision to suspend drilling for oil in the Gulf, refused to endorse the plan on Monday, though she is undecided.

“Sen. Landrieu has been and continues to be skeptical of paying for otherwise-beneficial proposals with tax hikes on the oil and gas industry,” said her spokesman, Aaron Saunders. “While these tax increases may be politically popular in some areas of the country, they have a disproportionately negative effect on working families in the Gulf Coast where much of the industry is located. Sen. Landrieu fully supports getting America’s economy back on track, but feels that it should not be done at the expense of the Gulf Coast.”