Stephen Comstock's remarks at press briefing teleconference on new tax polling

As prepared for delivery

Press briefing teleconference on new tax polling
Stephen Comstock, API director for tax and accounting policy
Thursday, March 21, 2013

Opening statement:

Good morning everyone. Thanks for calling in.

Seventy-four percent of registered voters believe politicians should address the nation’s budget issues without raising energy taxes, according to a new poll conducted last weekend for API by Harris Interactive.

Strong majorities hold this view even when the results are broken down according to party, gender and age. For example, 90 percent of Republicans, 74 percent of Independents, and 64 percent of Democrats do not believe politicians should raise energy taxes to address our budget problems.

In the poll, 69 percent of registered voters also believe raising taxes on oil and natural gas companies could drive up energy costs and 57 percent believe it could kill jobs and hurt the economy.

Sixty-three percent agree that raising taxes only on America’s oil and natural gas industry, or just on a handful of companies, would be bad tax policy, as well as unfair and discriminatory.

Our poll shows that raising taxes on the industry is just not something most Americans support.

And not only are most Americans skeptical about industry tax hikes, but the increases simply wouldn’t be effective. And we could raise far more revenue another way without putting additional burdens on the American people or on the economy.

The solution is to allow America’s oil and natural gas companies to produce at home more of the oil and natural gas we know our nation will be demanding. By encouraging more development of our nation’s ample oil and natural gas resources rather than relying so much on imports, we could deliver substantially more revenue to the government in the form of income taxes and royalties and lease bid payments.

Wood Mackenzie estimates a full program of development could increase the revenue the industry is now generating for the government by more than $800 billion. This would significantly ratchet up the $85 million a day our companies already deliver to the federal treasury – and dwarf the revenue that could be raised from higher taxes.

In annual terms, the $800 billion is far more than the $4 billion dollars a year of revenue cited in some proposed tax hikes on the industry. And even the $4 billion overstates what could be generated because it only would be temporary. That’s because tax hikes on the industry would discourage investment in new oil and natural gas projects here in the U.S. That would depress development, eventually reducing revenues while also costing jobs and increasing the trade deficit. In fact, within 15 years, we could be down $200 billion in revenue, according to research conducted by Wood Mackenzie.

Policymakers have huge challenges before them: a deficit still in the range of $1 trillion a year and a national debt above $16 trillion. Addressing the problems won’t be easy. But Americans are right: singling out America’s oil and natural gas industry is a bad way to solve them.

The good news is we could do much better by investing more in domestic energy production. We could generate more revenue along with more energy and jobs. That would require opening up more federal areas to oil and natural gas development and keeping regulations reasonable. But if policymakers are willing to get energy policy right, our industry can generate the revenue.

Thank you. We’ll send the complete poll results to you. And now I’ll be happy to take questions.