Why We Should Keep Tax "Loopholes" for Oil

Deborah Byers of Ernst & Young explains in Forbes why we should keep the current tax provisions for oil and gas companies, here's an excerpt:

"For the most part, energy companies are treated just like any other industry when it comes to taxes.  Much of what politicians call giveaways are simply timing issues related to when particular items can be expensed – governed by provisions in the tax code established decades ago to strengthen U.S. energy production.  These provisions are not tax credits, which allow for a dollar-for-dollar reduction in tax liability.

Changing the current tax code might make lawmakers happy, but it won’t achieve its hoped-for objectives and, in fact, will do the opposite:

• Integrated majors like ExxonMobil won’t be affected meaningfully
• Cash-strapped independents will be hit hard
• Domestic production will be depressed
• Job growth related to the shale boom will stall
• Tax revenue will fall

The technology advancements that are driving the shale boom, coupled with the existing tax code, have put the U.S. in a position not seen in years – one where domestic production is high and new reserves are creating economic opportunities across the country.  If we want to increase security of supply, keep retail energy prices low and create high-paying jobs, our energy policy should encourage future drilling by allowing proven tax provisions to remain in place."