As demonstrated by President Obama’s budget, the administration has launched an onslaught of unprecedented policies to restrict access to natural resources and increase taxes on America’s homegrown natural gas and oil industry. The attack has drawn the ire of Democrats and Republicans from energy-producing states. One Senate Democrat recently said, "I’m going to ask the president how he thinks that increasing substantially taxes on the oil and gas industry helps us to achieve our goal of domestic energy independence of a more robust domestic drilling program. It’s one of the areas where I take the strongest issue with the administration. ... But independent oil and gas producers, which are the backbone of the domestic industry, cannot bear the elimination of these tax credits.” I could not agree more. Of the nearly 6 million Americans who are directly and indirectly employed as a result of natural gas and oil exploration, production and refining, all should be alarmed with the adverse consequences of President Obama’s tax increases. His $31 billion increase in oil and gas taxes would significantly curtail the operating budgets of all exploration and production companies, big and small. Tens of thousands of land owners from Montana to New York and Alabama to New Mexico are the beneficiaries of monthly checks coming from the mineral royalties produced on their properties. Nearly every single one of these royalty owners would face tax increases under Obama’s plan. States annually receive billions of dollars in excise and severance taxes to support the critical funding of roads, schools and law enforcement. These revenues would significantly drop due to the forced cutbacks in exploration and production caused by these federal tax increases. Furthermore, every marginal well operator in the country should be acutely aware that these proposals will force the premature plugging of potentially tens of thousands of low-production marginal wells. Despite the rhetoric, America’s oil companies are already paying taxes at the highest rates. Figures from the Energy Information Agency indicate that America’s major oil producers already pay on average more than a 40 percent income tax rate. After President Jimmy Carter imposed a similar windfall profits tax on the oil and gas industry back in 1980, the nonpartisan Congressional Research Service later determined that its results were hugely counterproductive: "The WPT reduced domestic oil production between 3 and 6 percent, and increased oil imports from between 8 and 16 percent. … This made the U.S. more dependent upon imported oil.” For American jobs, for the international competitiveness of American companies and for the consumers at the pump, Congress must reject Obama’s energy tax increases. These counterintuitive policies will undoubtedly make our nation more dependent on foreign oil, not less. Inhofe, R-Tulsa, is ranking member of the Senate Environment and Public Works Committee.
These counterintuitive policies will undoubtedly make our nation more dependent on foreign oil, not less.