FOR IMMEDIATE RELEASE – June 18, 2009
Contact: Matt Letourneau 202-463-5945 WASHINGTON, D.C.— Imposing $80 billion in new taxes and fees on America’s oil and gas industry will increase our dependence on foreign oil, raise costs to consumers, jeopardize U.S. jobs and erode our economic competitiveness, according to a new report issued by the U.S. Chamber’s Institute for 21st Century Energy today.
Congress is currently weighing a proposal by the Obama administration to levy new taxes and fees on the oil and natural gas industry as a way to finance significant increases in government spending.
“We need more American sources of energy, not less, and that requires a balanced approach that is both fair to producers and provides reliable and affordable energy to American families,” said Karen Harbert, president and CEO of the Energy Institute. “These new taxes run contrary to those fundamental principles.”
The report, “Taxing Our Way to Energy Insecurity Again,” reviews the impacts of a similar tax increase in the form of a windfall profits tax that was implemented in the 1980s. According to the Congressional Research Service, those tax increases led to as much as an eight percent decline in domestic production, and a 13 percent increase in oil imports.
New taxes and fees make the United States less attractive for new energy investment as compared to projects outside of the country, according to the report. Given that America currently imports 60 percent of its oil, discouraging investment in domestic oil and gas resources would increase reliance on foreign energy sources and place foreign government-owned corporations, some of whose operations are largely subsidized, at a competitive advantage.
The report points out that over six million people work in the oil and gas industry in America – a good portion of them in small and medium sized businesses. If companies are forced to reduce operating expenses to pay new taxes or fees, some of these good paying American jobs will be at risk or companies will shift to lower cost opportunities overseas.
“If Congress enacts these new taxes and fees, the industry is likely to shed American jobs, at the same time the government is spending hundreds of billions of taxpayer dollars to create and retain jobs,” Harbert said. “We think that’s a short-sighted approach to energy security and exactly the opposite of what the American economy needs, especially in these tough economic times.” The report is available on the Institute’s website at www.energyxxi.org, along with a video reviewing its findings featuring Harbert.
The mission of the U.S. Chamber’s Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.
The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.