WASHINGTON — North Dakota Sen. Kent Conrad couldn't thank Harold Hamm enough.
“Thank you for what you've done for our country,” Conrad, a Democrat, told the chairman and CEO of Continental Resources at a Senate hearing Tuesday. “Thank you for what you've done for our state. … Thank you for making the investment. Thank you for taking the risk.”
Hamm, whose company has helped lead a resurgence in the domestic oil industry with its production from the Bakken formation in Conrad's home state, told Senate Finance Committee members they could also thank the federal tax deduction used by independent oil and gas companies to write off expenses.
The ability to deduct intangible drilling costs, Hamm told the tax-writing panel, allowed his company to persevere in the face of repeated early failures in extracting oil from the Bakken. Should that provision in the tax code be repealed, he said, the company would drill one-third fewer wells.
“If we do away with these (tax breaks), we'll stop the march to energy independence we've begun,” said Hamm, whose company is based in Oklahoma City.
Hamm is the energy adviser to Mitt Romney, the presumed Republican presidential nominee, but he said he was not testifying on behalf of the Romney campaign.
His testimony came at a hearing about how tax reform could affect the energy industry. Congress is expected to tackle individual and corporate tax reform late this year or early next year as part of a broad effort to reduce the debt and revive the economy.
Sen. Max Baucus, D-Mont., chairman of the committee, said the tax code now has provisions supporting a broad range of energy options, and he suggested they might need to be “technology-neutral” to make them fair.
“Tax reform is an opportunity for the energy sector to make real progress,” Baucus said. “It can move us further from foreign oil. It can lead us down a road to diverse, clean and secure energy resources.”