President Barack Obama on Wednesday released his budget proposal, which includes more than $46 billion in added revenue over ten years from the oil and gas industry.
Obama’s budget includes $44 billion in new revenue, achieved by removing certain provisions in the tax code, and $2.5 billion from reforming the royalty system.
The Oil and Gas Journal reported that a proposal to repeal the current method of accounting used in the industry would cost the industry a further $80.8 billion.
Four red state Democrats signed a letter in February imploring Obama not to single out the oil and gas industry. Democratic Sens. Mark Begich (Alaska), Heidi Heitkamp (N.D.), Mary Landrieu (La.), and Mark Pryor (Ark.) argued the oil and gas industry currently accounts for 9.2 million jobs and 7.7 percent of the U.S. Gross Domestic Product.
The Wall Street Journal notes that at least one of the deductions, which allows energy and some other companies to deduct 6 percent of qualifying income, applies to all manufacturers, but the president has only proposed repealing it for energy companies.
The American Petroleum Institute contends that raising taxes on the oil and gas industry now would cost 22,000 jobs and $223 billion in government revenue and would reduce the supply of oil and gas by 280,000 barrels a day by 2030.
The president’s budget would use part of the revenue from the oil and gas industry to fund a $2 billion Energy Security Trust to further finance green energy research despite the recent furloughs at Fisker Automotive and failures at other green energy companies.