Uncategorized

Energy access, not more taxes, key to raising gov’t revenues, says energy industry exec

No featured image available

Increased access and development of U.S. energy resources — including increased access to federal lands and offshore areas — is the key to raise more tax revenues for governments, not raising taxes and impeding industry, says the head of the country’s largest oil and gas lobby.

“Energy access — not taxes — is the key to unlocking new revenues for our government,” said Jack Gerard, President and CEO of the American Petroleum Institute, during his State of American Energy speech. And also stressed that lawmakers should “do no harm” when crafting policies and regulations that affect the energy industry.

“You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business,” he said in a question and answer session after his speech.

Gerard said that increased development of the country’s energy resources would actually generate more taxes from the oil and gas industry through increased lease sales, royalties, bonus bids, and more employment — meaning more taxpayers.

Gerard also suggested that the federal government look to the states as examples of how to conduct energy policy. States like Pennsylvania and North Dakota that have been accommodative to the oil and gas industry have seen tax revenues rise and economic conditions improve. On the other hand, exploration on federal lands and waters has has been falling.

According to API, the oil and gas industry contribute $86 million per day to the federal government in the form of royalty payments, rents, bonus bids, and other fees.

The industry helped create a $1.6 billion budget surplus in North Dakota, and development in Pennsylvania has was able to distribute $200 million in impact to each of the state’s 67 counties.

On Capitol Hill, a debate has been brewing over the tax code, specifically over deductions and tax loopholes. During the presidential campaign, President Obama said he was in favor of ending $4 billion in tax breaks to big oil companies.

Gerard said such tax subsidies don’t exist, but are “cost recovery benefits.”

“The oil and gas industry gets no subsidies, zero, nothing,” he said. “We get cost-recovery benefits, much like other industries.”

“We not only pay our fair share, we pay more than our fair share,” Gerard added.

In a press conference following the speech, Gerard said API is prepared to enter into the tax reform debate, and he suggested that reform that included lowering the corporate tax rate and made the code more uniform would be welcome.

Follow Michael on Twitter