Big Oil’s Good Deal - Obama Administration trying to eliminate tax breaks for Oil & Gas industry

[JohnWxy]

http://www.nytimes.com/2010/07/12/opinion/12mon1.html?scp=1&sq=&st=nyt

"Industry has spent $340 million on lobbying over the last two years to block these sorts of initiatives, and until recently Congress has been eager to do its bidding. This year could be different."

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The White House has proposed eliminating nine tax breaks. Some are modest, all are complicated, but in toto they provide a range of cushy benefits — fast write-offs for upfront drilling expenses, generous depletion allowances, and the like — that are available at virtually every stage of the exploration and production process.
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Apart from these benefits, two other areas cry out for reform. One is the royalty relief program, enacted by Congress in 1995 to encourage the kind of deepwater drilling that has now landed the gulf, its wildlife and its neighboring citizens in so much trouble. Royalty rates are currently 12.5 percent of the per-barrel price for onshore leases, and up to 18.75 percent offshore.

The law suspended royalties as long as oil remained below a threshold price of $28 a barrel. Prices have long since exceeded that threshold, even adjusted for inflation; and because the law was not tightly written, companies have been able to exploit its ambiguities to save themselves billions of dollars.{i.e. they have been avoiding paying the Royalties due US_JW}

Sima Gandhi, a tax expert at the Center for American Progress, a liberal advocacy group, estimates that the losses from lost royalties could eventually exceed $80 billion unless Congress fixes the law. It is high time to review the entire royalty relief program, which at current prices is surely outdated and may be unnecessary.
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[FBI_Un_Sub]

1. This is way overdue

Why do we keep subsidizing "Big Oil" when they work against the US? And subsidize (directly and indirectly) terrorists.