Despite best efforts of President Obama and the Democrats, potentially billions of dollars in tax incentives remains intact for energy companies.
The demise Monday of the bipartisan deficit “supercommittee” robbed would be foes of their opportunity this year to crush the incentives.
Christine Tezak, a senior energy analyst with the brokerage firm Robert W. Baird & Co., said the supercommittee represented the “greatest risk” to incentives for oil-and-gas companies.
While the issue is likely to resurface in subsequent talks over wider tax policy reform, few expect to see a broad tax code rewrite as the campaign season intensifies.
“The prospect of changes to oil and gas taxes moving before the election remain low,” Tezak said.
On the flip side, environmentalists mourned the loss of industry taxation.
“For the average family sitting down to their holiday dinner it makes no sense that we will continue to lavish billions of dollars in subsidies on oil corporations while forcing automatic cuts in vital clean air, clean water, wildlife and other domestic discretionary programs,” wrote the National Wildlife Federation’s Adam Kolton in a blog post Monday. (This same group has yet to comment on the millions of birds killed each year by windmills.)
The American Petroleum’s ads conversely assert that higher taxes hurt the economy, cost jobs and raise prices.
John Felmy, the group’s chief economist, said Tuesday that the industry isn’t declaring victory in the tax battle. “I have learned to never handicap Capitol Hill,” he told reporters on a conference call.
Felmy and other industry advocates say such proposals unfairly single out the oil industry when some incentives are available to a range of industries.
API has also argued that stripping tax incentives could harm pension funds that are invested in the industry.
“We will continue with those messages and be as diligent as we can,” Felmy said. As will we at MicroSeismic. The oil and gas industry has proven, time and again, that without our efforts, not only do economies suffer, we all do. Oil and gas is integral to each of our daily lives. When you tax the companies unnecessarily that provide it, the burden only rolls down to those that need it the most it.