Obama targets tax provisions that benefit oil and gas industry
An Oklahoma congressman, Rep. Tom Cole, says president's proposals would hurt independent producers.
WASHINGTON — President Barack Obama encouraged congressional leaders Tuesday to abolish “wasteful subsidies” to the oil and gas industry, but Rep. Tom Cole said the president “doesn't know squat about energy production.”
Obama, who has been trying since 2009 to eliminate some tax deductions for oil and gas producers, sent a letter to the Democratic and Republican leaders in Congress, urging them to steer the money instead to clean energy investments that would reduce the nation's dependence on foreign oil.
“Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsize profits this quarter,” Obama wrote.
Obama, whose political fortunes may depend to some extent on gasoline prices, offered no new proposals or arguments in the letter; he has been a frequent critic of “Big Oil” and the tax provisions he has targeted.
But his letter came a day after House Speaker John Boehner, R-Ohio, said in an interview that he was open to considering tax provisions related to oil and gas production.
Obama mentioned Boehner's comments in his letter and said he hoped “we can come together in a bipartisan manner to get it done.”
Cole, R-Moore, said Obama was “trying to score political points.”
“We get great politics out of the White House,” Cole said. “We just don't get great policy.”
The White House wouldn't understand the difference between Exxon-Mobil and a small independent producer in Madill, he said.
But Cole said eliminating long-standing tax provisions, such as deductions for intangible drilling costs and percentage depletion of reserves, would hurt independent producers and result in the shutdown of wells that produce small amounts of oil.
The effect on drilling
Tony Thornton, a spokesman for Oklahoma City-based Devon Energy, one of the largest independents in the country, said Devon had a federal corporate tax liability last year of about $1 billion.