Washington, D.C. - Senator Susan Collins (R-ME) introduced legislation today to eliminate the tax credits for oil and gas companies, which would save taxpayers an estimated $10 billion over five years. Portions of the savings generated from this initiative would be redirected to double the existing credits available for the development of alternative fuels and environmentally-friendly vehicles, and to pay down the national debt.
“I see no reason to provide tax breaks to one of the world's most profitable industries at a time when so many families and small businesses across the country are struggling. Continuing this policy is simply absurd considering that the net profits of a single oil company reached almost $10 billion in a single quarter. Clearly, taxpayers should not be expected to continue subsidizing this industry,” said Senator Collins. “This legislation would eliminate these needless tax subsidies for energy companies, and instead use this money to boost conservation and alternative fuels.”
Specifically, the legislation would eliminate three of the major tax credits for oil and gas exploration: Intangible drilling costs; excess percentage over cost depletion; and authorization of geological and geophysical costs of oil and gas exploration. The elimination of these needless subsidies would allow for the doubling of the tax credits designed to encourage the development of alternative alcohol and biodiesel fuels, and alternative technology vehicles, leave $8.7 billion for deficit reduction. The bill also contains a provision that would prohibit the use of taxpayer dollars to provide royalty relief to the oil and natural gas industry during periods where the price of oil is over $55 per barrel, or, for natural gas, the average price of natural gas is over $10 per 1000 cubic feet.