Taxes and CFTC Regulations

Since the new Administration took control in Washington D.C. in January, they have not let up on their intent to raise taxes on the natural gas and oil industry. It’s encouraging to see the formation of the Congressional Natural Gas Caucus last week, but meetings and press releases from a few friends in Congress alone haven’t stopped the Administration from targeting our industry to pay for its initiatives.

The President’s proposed budget would increase taxes on the oil and gas industry by $80 billion over the next 10 Years. The Treasury Green Book explanation of the proposals repeatedly justifies repealing oil and natural gas tax provisions by claiming each “distorts markets by encouraging more investment in the oil and natural gas industry” and “encourages overproduction of oil and natural gas,” which, it says, is “detrimental to long-term energy security.” Sound incredible? Don’t take my word for it; you can click here to read for yourself what the Treasury Department thinks of our industry.

If you’re thinking domestic production would fall and consumers would pay more for energy as a result of these massive tax increases, you’re right!

Click here to send a message to Congress asking them to oppose the President’s tax increases on domestic natural gas and oil producers!

Additional taxes aren’t the only way our industry can be harmed by legislation making its way through Congress. House Financial Services Chairman Barney Frank (D-MA) and House Agriculture Chairman Colin Peterson (D-MN) have proposed legislation that would dramatically alter the way in which OTC derivatives are regulated through the Commodity Futures Trading Commission. The proposed legislation requires capitalization of commodity hedges, and if passed, changes a companies’ ability to manage risk associated with volatility in commodity prices. Typically corporations use OTC derivatives to hedge the operating risks of their businesses or their cost of borrowing. This would severely impact drilling and budgets would be hit substantially.

Please take a moment to ask your Congressman to oppose H.R. 3795. Click here to find contact information for your Senators and Congressman.

Please pass this message along to anyone you think interested in protecting the American energy industry.