Obama escalates war on oil (and consumers, and industries)

All of these measures will raise energy prices for consumers and industries, amount to a substantial tax increase, lead to decreased domestic oil production and more dependence on foreign oil, decrease tax revenue, cause more unemployment, and discriminate against oil companies relative to other industries. Altogether a very bad idea, but consistent with Obama’s war on fossil energy:

The Obama administration proposed $36.5 billion of new oil and gas taxes as it released its proposed fiscal 2011 budget. The proposed levies—which it framed as removing tax preferences to help balance the federal budget and promote clean energy—were essentially the same as the ones it presented a year earlier.  …

The single biggest bite would be downstream, with the proposed repeal of the domestic manufacturing tax deduction for oil and gas companies. That would raise $17.3 billion over 10 years if enacted, OMB said. It also would make US refiners the only domestic business not covered by the manufacturing tax credit, which Congress enacted in response to foreign governments’ subsidies of industries in their countries.  …

“Unfortunately, in his search for ‘easy’ revenue, the president appears once again to be endorsing a series of tax change that will result in fewer American jobs, less government revenue, and a tightening of our already dangerous dependence on foreign, unstable energy,” [Independent Petroleum Association of America Pres. Barry] Russell said.  …

“We are disappointed that the administration has again chosen to single out the American oil, gas, and refining community for additional taxes under the guise of leveling the playing field with other corporations,” [National Petrochemical & Refiners Association Pres. Charles T.] Drevna said, adding, “In fact, it accomplishes the opposite and puts our members at a precarious disadvantage with foreign fuel producers.”  …

“For our members—the small businessmen and women of our nation’s oil and gas industry—this is a knockout blow,” Somerlyn Cothran, executive director of the National Stripper Well Association in Tulsa, said on Feb. 2. “Implementation of this budget proposal would mean a significant loss of jobs and a dramatic loss of tax revenues for each of the 35 states where our members are productive, contributing businesses. Plus, the resulting decrease in oil production will serve only to make America even more dependent upon foreign oil.”  …

Marc W. Smith, executive director of the Independent Petroleum Association of Mountain States in Denver, said on Feb. 2, “… This administration continues to assure us that they are not ‘anti oil and gas,’ and yet every week brings some counterproductive new policy to make developing American energy even more burdensome.”

Smith said the proposed tax hikes came in addition to proposed inspection fees, a nonproducing acreage fee, and a royalty rate increase in the US Department of the Interior’s fiscal 2011 budget request. “Every day, I hear concerns from our members about whether they will be able to continue developing energy in the West,” Smith said, adding, “I have to wonder if shutting down all energy production on public lands is the ultimate goal of this administration. They are forgetting that these are vital energy resources that belong to all Americans.”  “Obama renews call for oil taxes in 2011 budget

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