Over the coming months, you’re going to hear a lot about infrastructure and how the country is going to pay for it. America’s natural gas and oil producers support improving the country’s infrastructure, and in particular our energy infrastructure. But we have serious concerns about doing it on the backs of America’s energy producers.
In other words, it’s a bad idea to hike taxes on natural gas and oil companies and the more than $10 million employees the industry supports nationwide.
Let’s set the record straight: the natural gas and oil industry receives no special tax treatment. It is limited to the same level playing field available to all economic sectors, which includes policies that sustain and grow the billions of dollars in government revenue that the industry generates. But that’s not stopping Washington politicians from discriminating against the natural gas and oil industry – at a time when the industry is creating jobs and improving the economy. If you agree, click below to take action and make your voice heard.
The truth is that America’s energy companies support over 10.3 million jobs. Every job in natural gas and oil supports another 2.7 jobs in other sectors. And the effective tax rate for natural gas and oil has been historically higher than electric utilities, banks, airlines, and several other large industries.
What those trying to hike taxes on natural gas and oil won’t tell you is the industry is subject to the same tax code as other sectors of the economy. The only difference is that natural gas and oil investment often comes in the form of drilling a well – and some folks want to target this kind of activity.
Here’s what you need to know about terms you may be hearing in this debate:
Intangible drilling costs (IDC) allow energy companies to deduct ordinary business expenses, like labor costs, that are immediately deductible for other industries.
Percentage depletion is limited to the smallest independent producers and royalty owners and reflects the declining value of reserves over time—as you take oil or gas out of the ground, there’s less in the ground for the future.
Credits for enhanced oil recovery (EOR) and marginal wells support carbon capture projects when oil prices are low and help low production wells – which are often owned by small businesses – stay in operation during price downswings.
Provisions like these don’t give energy companies an advantage: they level the playing field across all industries and allow natural gas and oil to invest in new technology, more workers, and other aspects that contribute to the health of our nation’s economy.
America is on its way to recovery. That’s why this is no time to put jobs and investments at risk with new taxes.