The company paid $347 million last year in corporate income taxes and gross production taxes to states and ad valorem taxes to local governments, he said.
If the deduction for intangible drilling costs were eliminated, he said, it would cost Devon about $950 million in the first year — the same amount the company has budgeted for drilling this year in the Barnett Shale in North Texas.
“Take away that deduction, and it reduces our ability to continue drilling,” Thornton said.
The Senate last June voted 61 to 35 against an amendment containing Obama's proposals for eliminating tax provisions that benefit oil and gas companies.
Sen. Jim Inhofe, R-Tulsa, who led the debate against that amendment, said Tuesday that Obama apparently forgot the outcome of that vote.
“He now wants Congress to do exactly the opposite,” Inhofe said. “His letter is merely a distraction from what every American knows can help restrain rising prices: increase supply, that is, increase American energy production.”
A group called Taxpayers for Common Sense, best known for exposing congressional earmarks, came out Tuesday in favor of eliminating the provisions for oil and gas companies, calling for a “simpler, fairer and more equitable tax code.”
“Some in Congress are trying to go the opposite direction and provide even greater subsidies for the use of natural gas in vehicles,” the president of the group, Ryan Alexander, said in a letter to Boehner.
“This is the wrong direction.”
Reps. John Sullivan, R-Tulsa, and Dan Boren, D-Muskogee, recently introduced legislation to provide tax credits for the purchase of natural gas vehicles.