The oil and gas industry is opposing President Barack Obama's proposal to Congress to cut tax breaks for the industry saying it will cripple small businesses and punish American natural gas production.
The Independent Petroleum Association of America estimates that up to 20 percent of the country's oil and 13 percent of natural gas production could be wiped out if the proposed new taxes are enacted.
The White House has rejected those claims as unfounded, according to Reuters.
We can't tax our way to energy independence. What's needed is a comprehensive blend of American energy, including natural gas, oil and other alternatives. Unfortunately, this budget makes achieving that mix nearly impossible, Barry Russell, President and CEO of the IPAA said in a statement today.
In the 2010 budget unveiled Thursday, President Obama plans to eliminate big tax breaks for oil and natural gas companies in the Gulf of Mexico. His administration expects to raise $26 billion over the next 10 years by doing so.
The White House sustains that domestic oil and gas production subsidies do not significantly reduce the prices that consumers pay for products such as gasoline and home heating oil. The administration says oil, and to a large extent, gas, are intentionally traded commodities and their prices are determined in the world market.
Therefore those tax breaks result primarily in higher returns to the oil industry, according to the Presidentâ€™s budget proposal.