29 January 2014 21:47 [Source: ICIS news]
WASHINGTON (ICIS)--US energy sector officials on Wednesday charged that President Barack Obama’s renewed call for higher taxes on oil and natural gas producers is unwarranted and warned that tax hikes would undermine Obama’s own economic goals.
In his annual State of the Union address before Congress on Tuesday night, Obama again called for tax reform that, among other things, “stops giving $4bn a year to fossil fuel industries that don’t need it, so we can invest more in fuels of the future that do”.
Citing Obama’s call for reducing income inequality in the US, American Petroleum Institute (API) president Jack Gerard argued that the White House could help spur income growth by allowing more oil and natural gas development.
“Unfortunately, the president called for increased taxes on the oil and natural gas industry he needs to close the income gap and create jobs,” Gerard said.
“Punishing energy companies by raising taxes is no sound energy policy and could lead to less energy, less government revenue and fewer jobs,” he said.
Thomas Pyle, president of the energy industry think tank Institute for Energy Research (IER), argued that the nation’s oil and gas producers do not receive special tax breaks and that the sector pays an already high tax bill.
“The president once again raised the long-discredited claim that oil and gas industries are receiving ‘billions of dollars’ in tax breaks, as though the standard business deductions afforded to countless other job creators in our economy … are somehow undeserved or fraudulently claimed by the US companies who pay more taxes than any other industry,” Pyle said.
Both Pyle and Gerard called on Obama to approve the long-delayed Keystone XL pipeline as another way to boost jobs and incomes in the country.
In what some observers saw as contradictory, in his speech Obama also promised to ease restrictions on oil and gas production.
American Chemistry Council (ACC) president Cal Dooley focused on Obama’s call for investments in US technology and manufacturing, saying that “We hope he will remember that promoting innovation is one of the most effective ways to grow our economy, create opportunity and transform society”.
To support innovation in the chemicals sector and elsewhere, said Dooley, “the president can demonstrate his support for America’s innovators and manufacturers in an immediate and tangible way by supporting the bipartisan Chemical Safety Improvement Act (CSIA)”.
CSIA is legislation pending in Congress that would replace and update the nearly 40-year-old Toxic Substances Control Act (TSCA) that all parties agree badly needs modernisation. Passage of the bill is not expected until sometime in 2015.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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