Industry pushes Congress to keep oil tax breaks

The oil and gas industry is launching a media blitz  to garner support in the lame duck Congress for  extension of billions of dollars in industry tax breaks, a top trade association announced Tuesday morning.

The American Petroleum Institute said its television and print ad campaign is  aimed at shoring up support for deductions that companies receive on drilling costs, income from domestic projects and other areas, with a focus  on explaining the economic benefit of extending the deductions for the energy sector.

“Americans deserve to hear about energy from energy producers,” said Brian Johnson, senior tax adviser for API. “Energy is an engine of revenue for our nation. Eliminating our deductions is a tax increase and should be treated as such.”

The institute  said that its media campaign will target Washington D.C. and states where  the energy sector is central to the economy.

“We are taking every opportunity to engage with members of Congress about the peril of punitive taxes on the industry, especially when we are helping with jobs that the country so desperately needs,” Johnson said. “Our immediate focus is a continued educational campaign on the energy sector, how they contribute to economic growth, and looking at the bigger picture, how appropriate policies can help us do more.”

Johnson said that the energy sector’s worldwide corporate tax rates match that of other industries, even with the current deductions. It  receives a variety of tax deductions, including certain intangible drilling costs and a depletion allowance, which is available only to independent companies.

The American Petroleum Institute has argued that the continuation of the deductions would offset the impact of higher income tax rates that will result if tax cuts initiated by former President George W. Bush expire next year.

Obama’s fiscal 2013 budget plan has proposed roughly $40 billion in tax increases over 10 years that would focus on large energy companies as well as independent producers.