U.S. Treasury Secretary Attacks Tax Breaks for Oil & Gas Companies
By Emma Hinnigan
U.S. oil and natural gas producing companies should not receive federal subsidies in the form of tax breaks because their businesses contribute to global warming, U.S. Secretary Timothy Geithner said when speaking to Congress on March 4, 2009. Geithner explained, “we don’t believe it makes sense to significantly subsidize the production and use of sources of energy that are dramatically going to add to our climate change. We don’t think that’s good economic policy and we think changing those incentives is good for the country.” The Secretary’s comments, made when speaking to the Senate Finance Committee on the proposed budget, reinforced the Obama administration’s stance that new U.S. energy policy will focus on promoting renewable energy sources and rely less on traditional fossil fuels. The proposed budget would levy an excise tax on oil and gas produced in the Gulf of Mexico, which is expected to raise $5.3 billion from 2011 to 2019. However, the tax will only affect companies currently using a loophole to avoid paying royalties on the energy supplies they drill. Those already paying royalties would get a tax credit. Senator John Cornyn of Texas criticized the proposed tax, saying it will hurt independent energy companies who provide a large share of U.S. oil and gas supplies.
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http://uk.reuters.com/article/oilRpt/idUKN0454844120090304
