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 |  | | << Back to Wellhead | | Obama continues attack on oil and gas jobs February 2010 | |
| By: Brook Simmons, OIPA federal lobbyist President Barack Obama unveiled his plan to put thousands more Americans out of work this month with a budget that would increase the deficit and make the United States more dependent on foreign oil producing nations.
Ignoring the concerns of several oil patch Democrats, Obama proposed taking at least $40 billion from domestic oil and gas producers over 10 years through new taxes and permitting, inspection, enforcement, and royalty fees.
Among Obama’s top job killers are again the proposed repeal of expensing for Intangible Drilling Costs and repeal of Percentage Depletion.
“The elimination of these two accounting procedures would overwhelmingly impact smaller independent oil and gas explorers, not Big Oil,” said U.S. Senator Mary Landrieu, D-La. “This will reduce the percentage of oil and gas that is produced domestically without having any impact on how much energy America consumes. The result would be putting thousands more Americans out of work at a time when we should be creating, not eliminating, jobs. That is poor policy.”
Taken in context, we need to understand that Obama also is attempting to ignite class warfare.
Faced with staggering deficits and the likely collapse of cap-and-trade and health care reform, the rhetoric from the Obama camp is becoming shrill and shouldn’t be ignored. To Obama, those who work in finance are “fat cat bankers.” Secretary of the Interior Ken Salazar said the oil and gas industry had been “kings of the world” under the previous administration and Interior would no longer serve as its “handmaiden.” Corporations appear to be the only “special interest” of concern.
Washington is a rough-and-tumble place, especially in a hotly contested election year, but unusual linguistic currents are beginning to flow from the Administration and readers should pay attention. They are opposite but equivalent to terms like “union thug” and their usage during policy discussions should be of concern to all.
Despite growing recognition among voters and Congress that America is sitting on top of a 100-year supply of clean burning natural gas that could simultaneously create thousands of jobs and immediately address energy security and climate concerns, liberals cannot bring themselves to embrace a foe that stars so prominently in fundraising appeals.
OIPA and its allies made good progress explaining the importance of IDC and Percentage Depletion in 2009. The industry is in a better position today versus a year ago, but the work must continue.
While the tax bite to oil and gas would be far greater than the tax bite to coal, the industries likely will be working on separate tracks to oppose the Obama budget. This bodes well for discussions with Democrat swing votes on the Senate Finance Committee that have both coal and oil and gas interests in their states.
On other fronts, although a handful of senators continue to discuss cap-and-trade legislation, most acknowledge that cap-and-trade plans are dormant if not dead. Observers expect Congress to work on legislation that incents various efficiency and clean energy technologies in the near future. The bill may include an attempt at a renewable electricity standard – something that may give SEC Conference senators heartburn. Those who wish to offer a cap-and-trade amendment in the Senate may be given an opportunity to come up short publicly.
Meanwhile, U.S. Senator Lisa Murkowski, R-Alaska, and 40 other senators including Democrats Landrieu, Blanche Lincoln of Arkansas and Ben Nelson of Nebraska, have introduced a resolution of disapproval under the Congressional Review Act to prevent the EPA from regulating greenhouse gas emissions.
The Murkowski measure has been referred to the Committee on Environment &Public Works. If the committee does not report the measure within 20 days, 30 senators can force its discharge and its expedited consideration on the Senate floor. The measure cannot be filibustered. To block the EPA from acting, the resolution must be passed by both houses of Congress and the President must sign it, or Congress must overturn the President’s veto of the measure.
The Congressional Review Act was authored by former Oklahoma Senator Don Nickles and Majority Leader Harry Reid in 1996. Congress used the measure to overturn the Clinton-era ergonomics regulation. OIPA will lend its voice in support of the Murkowski effort.
The U.S. Senate continues to work to find a bipartisan compromise on financial reform legislation. However, President Obama’s proposal to raise taxes on banks and prevent commercial banks from engaging in proprietary trading activities have complicated and delayed discussions including those regarding the legitimate use of hedging to manage risk.
Finally, the U.S. Supreme Court ruled in late January that trade associations and for-profit corporations may now make direct, uncoordinated (that is independent from candidates and their campaigns) communications expenditures – including advertising, voter guides, candidate questionnaires, and voting records – to educate the public, employees, customers, and vendors about candidate positions on issues critical to the industry’s future.
The ruling did not overturn the prohibition on direct corporate contributions to candidates.
OIPA views the decision as extremely positive and another reason for optimism as it works to build on 2009’s successes.
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