Oil industry bashes White House budget plan

The White House proposal to repeal nearly $40 billion in oil, gas and coal industry tax breaks over a decade drew a quick attack from the oil industry’s largest trade group Monday.

“With America still recovering from recession and one in ten Americans out of work, now is not the time to impose new taxes on the nation’s oil and natural gas industry. New taxes would mean fewer American jobs and less revenue at a time when we desperately need both. A robust U.S. oil and gas industry is essential to the recovery of the nation’s economy,” said API President Jack Gerard of the White House fiscal year 2011 budget plan unveiled Monday.

The White House wants to end over $36.5 billion in oil-and-gas tax breaks -- including repeal of a lucrative tax break for domestic manufacturing -- and another $2.3 billion in coal industry tax incentives.

The White House linked repeal of the oil industry tax breaks to development of alternative energy. “Repealing fossil fuel tax preferences helps eliminate market distortions, strengthening incentives for investments in clean, renewable, and more energy efficient technologies,” the budget proposal states.

The proposal also cites last year’s pledge by G-20 nations to phase out fossil energy subsidies and claims the repeal of subsidies would help slow greenhouse gas emissions.

“In addition, removal of market distortions created by fossil fuel subsidies will lead to a more efficient allocation within the energy sector as well as across sectors, likely with positive impacts on National output and gross domestic product,” the plan states.