Energy Today - February 11, 2011

Rayola Dougher
Posted February 11, 2011

Oil & Gas Journal: Tax change would hurt US producers overseas, API-backed study finds: US oil and gas producers would not be able to compete successfully against their foreign counterparts if long-standing rules covering taxes on foreign income are changed, a new study by Wood Mackenzie found. The study, which the American Petroleum Institute commissioned, said U.S. producers would face potentially lower returns from foreign operations, would bid on fewer projects, and would successfully bid less often if Obama administration foreign tax credit modification proposals are adopted. "Revising the rules in this way would surely hurt U.S. companies and U.S. workers," Stephen Comstock, API tax policy manager, told reporters at a Feb. 8 briefing. "If U.S.-based companies are forced to withdraw from an oil and gas development abroad because a new law instantly turns it uneconomic, that affects jobs at home and it potentially reduces revenues. I agree that this provision would raise money, but not because it closes some loophole or fixes some existing problem. It merely subjects our companies to double taxation."

The Houston Chronicle: Ex-Shell head says energy policies choke economy: Former Shell Oil Co. president John Hofmeister said Thursday the Obama administration's energy policies and regulations are strangling the U.S. economy and preventing the country from decreasing its dependence on foreign oil. Testifying before the House Energy and Power Subcommittee, the Houston businessman blamed the administration for restricting offshore drilling after the oil spill in the Gulf of Mexico last year. "I believe that the decline" in drilling in the Gulf of Mexico "will be sharper and deeper than what anyone is currently projecting," he told lawmakers. "We have made a horrible error as a country." Hofmeister was one of six energy experts testifying about the effect of Middle East political unrest, including the ongoing protests in Egypt, on the U.S. oil market. The panelists presented a gloomy view of the America's energy future if restrictions on domestic production remain. The Obama administration lifted a moratorium on deep-water drilling in October, but the government has not approved any projects that would have been blocked by that ban.

Additional Resources:

The Hill: OVERNIGHT ENERGY: Allen is back

Perspectives: Yet another attempt to undermine the nation's energy industry