Reuters Summit-Obama tax plans draw ire of energy companies

The Obama administration’s plan to do away with billions in tax breaks for U.S. oil and natural gas companies faces a tough and expensive fight from the industry, which says the proposals would threaten energy security and raise costs for everyone.
The budget proposal, which would have to be approved by Congress, aims to repeal rules that allow oil and natural gas companies to expense some intangible drilling costs.

During last year’s presidential campaign, Barack Obama had called for a windfall profits tax on energy producers, which were reaping record profits as oil and gas prices soared. But those prices have since eased, squeezing spending budgets for new energy development.
“This has to be the only government in the world that is trying to stop the production of any source of energy,” Larry Nichols, chief executive officer of Devon Energy Corp, told the Reuters Global Energy Summit.

Recent developments in drilling technology have given exploration and production companies the tools needed to tap vast reserves on natural gas locked up in shale formations. Experts estimate those supplies are enough to meet the U.S. demand for 100 years.

And energy companies argue Obama’s tax plans would rob them of the cash they need to produce a plentiful domestic source of clean-burning energy.

Guardian