As I noted yesterday, one of the more aggressive elements of Obama’s 2011 budget is the proposal to eliminate 12 tax breaks for oil, gas and coal companies, which the administration estimates will raise up to $39 billion in the next 10 years.
“All you have to do is look at the record profits of the oil and gas world in the last several years,” Interior Secretary Ken Salazar told reporters on Monday in announcing the budget proposal. “In my view, you’re going to continue to see a great interest in oil and gas because it’s a essential part of our economy today. It’s expected that it will be, and I know it will be in the years ahead. And so I think the oil and gas industry will do just fine.”
Unsurprisingly, the industry is balking at the possible revocation of government handouts. The Independent Petroleum Association of America said in a statement that the budget request would “strip billions of investment dollars from US natural gas and oil production” and “could cripple the American producers that are pivotal in developing US natural gas and oil.”
American Petroleum Institute President Jack Gerard also criticized the elimination of tax breaks, arguing that a “robust U.S. oil and gas industry is essential to the recovery of the nation’s economy.” “With America still recovering from recession and one in ten Americans out of work, now is not the time to impose new taxes on the nation’s oil and natural gas industry. New taxes would mean fewer American jobs and less revenue at a time when we desperately need both,” said Gerard in a statement.
They might have a point. The outcry about revoking Big Oil’s tax breaks came on the same day as ExxonMobil reported the lowest earnings in 7 years — just $19.4 billion dollars.