Tax Reform Right

Any tax reform will significantly impact how businesses look at the economics of their investments and any new tax rules that affect America’s oil and natural gas industry could directly impact the amount of energy that is produced and supplied to the economy. It is critically important that any tax reform must be pro-growth and pro-job creation.

Since oil and natural gas reserves are depleting resources, substantial investments must be made on a recurring and continuous basis, and a stable and predictable cash flow is critical to the economics supporting U.S. projects. Oil and natural gas exploration and drilling investment analysis is very similar to the investments made by companies with a heavy concentration of research and development, where the technologies of tomorrow must be funded by the successes of today.

Therefore, any new pro-growth, pro-jobs tax system must incorporate competitive and robust capital cost recovery provisions that take both risk and economic development goals into account.

Oil and Gas Supports

Energy is the foundation for our economy and standard of living, and oil and natural gas provide the majority of the energy that American’s depend on every day – at home and at work. All industries will be impacted by any tax reform effort. But it is imperative that any new tax system not specifically target any one industry over another for additional tax benefits, burdens or costs. 

Using the tax code to pick winners and losers should be avoided. Specifically, within the energy sector we believe that any new tax system should not favor one form of energy at the expense of others or one type of taxpayer at the expense of others, particularly those engaged in the same activities. In a growing economy, all forms of energy production should be encouraged, and efforts to favor one form of energy over others should be avoided.

Below, a new video on pro-growth tax reform – the ways it can encourage economic growth, spur job creation and help keep energy costs down – especially relevant as legislative efforts move ahead in Congress:


The fact is the natural gas and oil industry supports America like none other, with an effective tax rate – total income taxes imposed by federal, state and foreign governments divided by pretax income – that tops all other industries. 

                Effective Tax Rate

Pro-growth tax reform is critically important for a number of U.S. industries, including natural gas and oil. With the right reforms a modernized tax code can encourage business growth – instead of discouraging it – that in turn will support job creation and generate tax revenues for government. In the energy sector, pro-growth reforms will help foster the increased natural gas and oil production our country needs to be secure in the future. 


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