NPRA blasts US bill to repeal oil tax breaks as energy execs testify to Senate
The president of the National Petrochemical & Refiners Association (NPRA) spoke out on Thursday against US Senate proposals to eliminate tax breaks for major oil producers, alleging that such policy would give foreign competitors an unfair advantage.
“Imposing what would amount to a multibillion-dollarenergy tax would be bad for American consumers, for the American economy and for America’s national security,” said Charles T. Drevna, president of NPRA.
“It would hurt American companies producing energy and fuels in our own country and give foreign competitors an unfair advantage, endangering American jobs and making America more reliant on foreign energy,” he continued.
“It makes no sense to slap billions of dollars in new taxes on energy that Americans use every day to subsidize other forms of energy that can’t compete on their own in a free market,” Drevna said, apparently referring to biofuels.
Drevna’s comments came as five major executives for the targeted companies – ExxonMobil, Shell, BP, Chevron and ConocoPhillips – spoke at a Senate Finance Committee hearing in Washington, D.C. on Thursday.
The hearing came following a bill proposed on Tuesday by a trio of Democratic US Senate members, which would repeal tax breaks for the five largest oil companies.
The bill’s sponsors say it would save US taxpayers above $2 billion/year, potentially easing budget deficits.
But several panelists, including ConocoPhillips CEO Jim Mulva, said misinformation about the industry’s tax liabilities was being used to justify proposed tax increases.
“Our industry already has the highest effective tax rate in the US,” said Mulva. “Increasing these taxes would cost jobs and raise gasoline and other consumer prices, while actually unintentionally reducing the government’s tax revenue by discouraging investment by the industry’s largest and most financially capable companies.”
President Barack Obama has repeatedly targeted major oil companies, which largely enjoyed strong profits to begin 2011, for the rapid rise in retail gasoline costs.
But ExxonMobil CEO Rex Tillerson appeared to put the blame on speculators, telling Congress on Thursday that the fundamentals of supply and demand showed that oil should be in the range of $60-70/bbl.
The legislation is scheduled for a vote in the Senate next week.
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