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For Immediate Release
June 9, 2010

WASHINGTON - Today, Sen. Bernard Sanders (I-VT) is expected to offer an amendment that would increase taxes on American energy companies by up to $40 billion - with much of the new tax bill targeting smaller, independent oil and natural gas producers. The proposal mirrors a similar energy tax increase proposed earlier this year by President Obama.

"America's independent oil and natural gas companies, not so-called 'Big Oil,' develop 90 percent of the nation's oil and natural gas wells, providing this country with an important safety net against increased reliance on foreign oil," said Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA). "This punitive tax proposal on American companies would result in needless layoffs, less American-made energy and, coincidentally, less tax and royalty revenues generated for state and federal treasuries. How is that a smart energy, economic or national security policy?"

IPAA estimates that this new tax proposal would reduce investment in new U.S. production by 20 to 40 percent. And, at the same time, it could drive down U.S. oil production by 20 percent and natural gas production by 12 percent; potentially killing thousands of jobs.

Russell continued, "Contrary to the justifications in Sanders's energy tax proposal, here are the facts: Virtually no industry in the United States pays more in taxes, royalties and revenues than America's energy producers, and very few industries have the potential to create as many high-wage jobs in our current economic climate as quickly and effectively as we do. And while efforts to impede that work may produce short-sighted budget relief in the near-term, it will result in far less revenue, investment and activity in American resource development in the long-term - precisely the things that we should be promoting moving forward."

The Sanders amendment is part of a larger tax "extenders" package that has grown from the $113 billion that was approved by the House several weeks ago to a Senate package that now costs upwards of $140 billion. Dow Jones Newswires reports that the Congressional Budget Office said Tuesday the bill would add $85 billion to the federal budget deficit over the next decade, roughly $25 billion more than a version of the legislation passed by the House last month.

"Since the days when the tax code was first written, legislators understood the large capital investments necessary to find and produce American oil and natural gas," said Russell. "These ordinary and necessary incentives have provided American energy for nearly 100 years. This has been a success story that shouldn't end today."

For more information:

• Press Release on Pres. Obama's Plan to Increase Taxes, Moratoria on Drilling
• Fact Sheet on Tax Hikes Proposed by President Obama
• IPAA Testimony Before Senate Finance Committee