Bruce Vincent, CEO of Houston’s Swift Energy and chairman of the Independent Petroleum Association of America today declared the industry’s campaign against President Obama’s proposals to eliminate oil and gas company tax breaks a success — at least for now, according to a post by our colleagues at Texas on the Potomac.
“While it is still a part of Obama’s budget, it is not set in legislative motion” and is “clearly not an ’09 agenda item” for Congress, said Vincent, who was addressing reporters at the Platts Energy Podium. “We had some really good success educating people and (making sure they understood) the unintended consequences” of the tax initiatives.
The Obama administration first proposed doing away with more than a half dozen tax provisions used by the industry in February as part of his budget request to Congress. Although the Senate Finance Committee held a hearing in September to vet the tax proposals, the initiatives have not advanced in Congress.
The IPAA has focused most of its attention on preserving the 96-year-old deduction for intangible drilling costs, such as repairs and hauling supplies. The group said eliminating the IDC deduction would dry up capital needed to finance new wells.
“That has a direct impact on cash flow and investment,” Vincent said. “If you took that away, you (would) dramatically affect every company’s ability to invest in new drilling activity.”