Published on March 13th, 2014 | by Andrew Meggison28
Obama Wants To Eliminate Tax Breaks For Oil Companies
March 13th, 2014 by Andrew Meggison
It’s tax season again, and that means the annual plea from the Obama Administration for eliminating $4 billion in annual federal tax incentives for the oil and natural gas industry. This year there was an additional request however, earmarking that money for advanced alternative fuel technology research. Does it stand a chance of passing?
Every year around tax season, President Obama asks that the taxpayer subsidies that go to oil and gas companies be repealed. The logic being that since these companies are making record-breaking profits, they don’t need subsidies. That sounds logical. In addition to abolishing the subsidies, the President also asked to cut tax credits for oil and gas produced from marginal wells.
Notably different this year was Obama’s request for $2 billion for alternative fuel research projects – with the $2 billion coming directly from royalties from oil and gas development on federal land. The federal land catch is an interesting tactic, as companies are lining up to start drilling on federal lands containing once-unreachable natural gas and oil pockets through fracking.The proposal also included new inspection fees totalling $48 million for onshore oil and gas drilling on federal lands, though obviously some people are wary of opening places like George Washington National Forest to fracking.
Unfortunately, these annual proposals are mostly symbolic in nature. Congress is responsible for writing and passing government spending bills, not the President. Will we ever see the corporate handouts to oil and gas companies ended?
Source: Platts.com | Image: Argonne National Laboratories