Dem Congressman Dan Boren: Obama Uninformed About Oil and Gas Industry

(BOREN.HOUSE.GOV) - U.S. Congressman Dan Boren issued the following statement regarding President Obama's letter today requesting Congressional leaders eliminate tax provisions that are absolutely critical for domestic oil and gas production for thousands of independent producers across the nation.

"President Obama is completely uninformed about the oil and gas industry. The industry is not made up of just major companies. It is made up of small independent firms like those in Oklahoma that produce a vast majority of our domestic production. For every CEO of a major company, there are literally thousands of blue collar jobs that are affected by his administration's energy policy. It is a policy that is very inadequate and has left so many on the gulf coast unemployed. Americans are tired of empty rhetoric on both sides and want a real plan. If the President doesn't want to stand up and be a leader, then his silence would be appreciated from people who are trying to find solutions."

Specifically, the Administration is seeking to repeal the "percentage depletion" and "intangible drilling costs (IDCs)" tax incentives. The removal of these provisions would negatively affect domestic independents who utilize them to attract the capital necessary to drill new oil and gas wells inside the United States. It is estimated that eliminating percentage depletion and IDCs for domestic independents would reduce U.S. drilling by 30-40 percent, thereby increasing the nation's dependence energy from foreign sources. Furthermore, the major oil companies are barred by law from receiving percentage depletion altogether, as it only is given to domestic independent producers. The IDC preference is only available for domestic drilling activity, and as the major oil companies drill primarily outside the U.S., the domestic independent sector of the industry will yet again bear the brunt of losing this critical provision.