Oil industry ramps up opposition to repealing tax breaks

A powerful oil industry trade group is launching a broad new ad campaign to prevent legislation that ends billions of dollars worth of tax breaks from gaining political traction.

The American Petroleum Institute will run television ads in 10 states — including several swing states — beginning July 6 that allege the plans would harm the economy and cost jobs.

President Barack Obama and several Democrats have floated plans to end various incentives, such as write-offs for drilling costs and the industry’s ability to claim a lucrative manufacturing tax break.

But the ads will make the case against the measures by showing “ 'working Americans’ responses to the potential for new taxes on the oil and natural gas industry,” API said Friday. They will run in Colorado, Michigan, North Carolina, North Dakota, Pennsylvania, Virginia, Maine, Missouri, Ohio and West Virginia.

“Americans have historically been suspicious of taxes on the industry that produces most of the energy they consume. They deserve to be informed about new proposals that would increase those taxes by many billions of dollars a year,” said API President Jack Gerard in a prepared statement.

A spokesman for the group did not provide the cost of the ad buy.

The ads come amid a flurry of House and Senate proposals aimed squarely at incentives enjoyed by the industry, which is on the defensive in the wake of the Gulf of Mexico oil spill.

Democrats are planning energy bills and measures that respond to the spill that could be vehicles for plans that roll back industry incentives.

Rep. Earl Blumenauer (D-Ore.) this week floated legislation to end tax breaks that his office said are currently projected to cost the government $30 billion in lost revenue over five years.

“By continuing to artificially subsidize fossil fuels, we undermine investments that will guarantee our energy dependence. It is time for our country to shift gears, end the billion dollar carve-outs for the largest oil companies, and start investing our limited taxpayer dollars in America’s future rather than America’s past,” states a letter to colleagues that Blumenauer circulated Thursday.

He is a member of the Ways and Means Committee that crafts tax policy.

The industry prevailed in one battle over its tax incentives earlier this month. On June 15, the Senate voted 35-61 against Sen. Bernie Sanders’ (I-Vt.) plan to repeal over $30 billion worth of tax breaks and steer the money into energy efficiency programs and deficit reduction.