Specifically, Section 1504 of Dodd-Frank requires any company engaged in the commercial development of oil or natural gas, as well as hard-rock minerals, to disclose in its annual report certain payments made to the United States or a foreign government. Such payments include taxes, royalties, license fees, production entitlements and bonuses. Specific rules for enforcing this section of the law are currently being developed by the Securities and Exchange Commission (SEC), and the Commissioners are expected to approve them on August 22.

The alleged purpose of Section 1504 is to increase transparency in the oil and gas industry, particularly as regards foreign operations. In practice, it will impose expensive compliance obligations and red tape on affected companies who are already subject to the Foreign Corrupt Practices Act (FCPA) that prohibits payments to foreign officials for the purpose of obtaining or retaining business.

Section 1504 requires a summary of expenses by country as well as by project. Heretofore considered confidential and proprietary, such information will now be placed in the public domain where it can be accessed by competitors as well as the public at large. What’s more, a statement of financial payments must be submitted to the SEC in addition to appearing in a company’s annual report.

Though Section 1504 may be based on good intentions, in the real world of oil and gas competition it could put U.S. energy companies at a disadvantage when bidding for contracts against state-owned or state-controlled companies such as Russia’s Gazprom or the China National Petroleum Company.

Simply put, public disclosure of all payments to foreign governments would provide non-SEC registered companies, whether state-owned or private, an opportunity to undercut American bids. What’s more, non-SEC registered companies would have a leg-up in forming joint ventures with national oil companies who control more than 70 percent of global oil production.

To make matters worse, President Obama continues to push for higher taxes on the U.S. oil and gas industry to ensure they pay their “fair share.” In fact the industry pays more than $85 million to the federal government every day in taxes and fees. Nonetheless, he has proposed ending the tax rule that allows companies to deduct nine percent of their production costs, as well as some intangible drilling expenses, and the tax credit for royalties paid to foreign governments. At the same time, Congress is pushing a bill to repeal the “last in, first out” (LIFO) tax deduction that allows oil and gas companies to match their income with the cost of goods sold in that year.

Also on the chopping block for oil and gas companies is the Section 199 manufacturing deduction that allows companies to retain earnings for reinvestment by charging them a reduced tax rate. Eliminating this particular deduction would have a dramatic impact on the job market, encouraging segments of the oil and gas industry to outsource their work to countries with lower tax rates, and it could also result in higher prices for gasoline, diesel, and jet fuel.

In an otherwise moribund economy, the oil and gas industry has been one of the few sectors recording substantial job gains. Elimination of important tax incentives for the energy sector, coupled with the new financial disclosure requirements under Dodd-Frank, may punish the 9.2 million Americans whose jobs are supported by this industry. These proposals could also send billions of additional dollars and thousands of jobs to foreign competitors who don’t face similar taxes and regulation. Finally, higher tax and compliance costs on U.S. energy producers would likely be passed on to consumers, with seniors, low-income households and small businesses hit the hardest.

To ensure that America’s energy companies remain globally competitive, the SEC should promulgate rules under Dodd-Frank Section 1504 that will allow oil and gas companies to report their payments to foreign governments on a broad, aggregated basis. At the same time, Congress and the White House should abandon their discriminatory fiscal attacks on the industry that will destroy jobs and impose additional obstacles on America’s path to energy independence.

Weinstein is associate director of the Maguire Energy Institute in the Cox School of Business at Southern Methodist University and a fellow with the George W. Bush Institute.