Obama seeks higher energy taxes, offshore delays - API

06 April 2009 18:38  [Source: ICIS news]

WASHINGTON (ICIS news)--A top US oil and gas industry official on Monday charged that the Obama administration is undermining the nation’s energy future with proposed tax increases on production and delays in opening offshore resources.

Jack Gerard, president of the American Petroleum Institute (API), warned in a letter to members of Congress that higher taxes on energy firms and “a pattern of delay” in opening offshore areas to drilling and research in oil shale will worsen the nation’s energy crisis.

Gerard cited Energy Secretary Steven Chu, the International Energy Agency (IEA) and private sector studies saying that the anticipated end of the recession in 2010 will trigger a sharp increase in demand for oil and natural gas and bring a supply crunch.

At a time when US policymakers should be doing everything possible to stimulate all US energy resources, Gerard said the administration’s policies inhibit energy development.

“Unfortunately, the administration has put forth budget proposals that call for billions of dollars in new taxes and fees on the oil and natural gas industry,” he said.

“If imposed, these taxes and fees could have a debilitating effect on our economy when our nation can least afford it,” he added. “They would reduce investment in new energy supplies, meaning less energy produced for American consumers.”

“We cannot tax our way out of our energy problems,” Gerard said.

The US petrochemicals industry and downstream chemical manufacturers are heavily dependent on natural gas as a feedstock and facility fuel. In his previous position as president of the American Chemistry Council (ACC), Gerard was a leading advocate for renewed energy development in US outer continental shelf (OCS) regions.

Gerard noted that in October last year Congress “did the right thing” in allowing its 27-year-long moratorium on offshore drilling to expire.

Now, however, “a pattern of delay is emerging when it comes to developing America’s oil and natural gas resources”, he said.

Gerard cited a recent decision by the Interior Department to postpone the five-year offshore development proposal initiated by the Bush administration and putting off development leases for oil shale projects in western states.

He cautioned that tax disincentives and development delays will not only reduce the country’s energy options but also cost the country jobs and royalty revenue and weaken national security.

To discuss issues facing the chemical industry go to ICIS connect

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles