07 May 2009 23:22 [Source: ICIS news]
WASHINGTON (ICIS news)--US oil and natural gas producers said on Thursday that President Barack Obama’s federal budget imposes new taxes on energy production and will lower oil and gas output and raise end-user prices.
The White House released its detailed revenues and spending plan for fiscal year 2010, which begins 1 October this year, saying the federal government will need $3,600bn (€2,700bn) to operate.
The formal budget sent to Congress on Thursday is more detailed than the budget outline issued by the White House in late February. That preliminary budget plan also was criticised by energy, chemical and construction interests.
The budget spends on education and health care reform and includes funding to pay for existing and growing programmes such as Social Security, the federal retirement plan for US taxpayers, and Medicare, the national health plan for seniors.
To pay for those outlays, the budget calls for tax increases on business and wealthy individuals.
Included in those increases, said oil and gas interests, are taxes that will reduce domestic production and raise energy prices.
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“These businesses would be crippled by these new taxes and we project that up to 20% of our nation’s oil and 13% of natural gas production could be wiped out if the president’s budget proposal is enacted,” Russell said.
The Natural Gas Supply Association (NGSA) said that the Obama budget will add more than $26bn in new taxes on the gas and oil industry over ten years.
“American consumers will likely see less natural gas domestic exploration and production and, as a result, are at risk for higher natural gas prices,” the association said.
Russell said the budget cuts tax deductions, incentives, credits and amortisation benefits for oil and gas producers and raises federal fees and excise taxes on offshore oil and gas production.
The White House budget proposal will now work its way through Congress.
($1 = €0.75)
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