Oil industry to supercommittee: Let us do our thing

By Bernie Becker - 09/15/11 12:42 PM ET

The oil-and-gas industry has a message for the supercommittee: Let us get down to business.

On the heels of a recent study asserting the industry could create more than a million jobs over the next decade, American Petroleum Institute officials said Thursday they were ready to tell the 12 lawmakers on the deficit-reducing panel that the energy sector could help spark economic growth and rein in the national debt.

“You have a choice here,” Marty Durbin, API’s executive vice president, said on a conference call. “If you implement policies that allow this industry to get back to work, we can end up creating jobs.”

API officials also said on the call that they were organizing grassroots efforts to get their message across.

The group’s lobbying efforts come as Democrats continue to push for ending tax breaks for the oil-and-gas industry, with President Obama calling for the sector to pay more to help fund his $447 billion jobs bill.

Some Democratic supercommittee members have also signaled that the panel should look at eliminating credits and deductions used by the industry to roll back deficits.

But industry representatives argue that the Democratic push is short-sighted, and said Thursday they plan on making that point to supercommittee members.

In all, the study commissioned by API and conducted by Wood Mackenzie, a consulting firm, found that increasing energy development would add $127 billion to the Treasury by 2020.

Many of the actions that would be needed to increase oil-and-gas production, and thus increase jobs, wouldn’t require congressional action, Durbin added Thursday, specifically mentioning the controversial Keystone XL pipeline to Canada’s oil sands.

But increasing taxes on the industry, the study argues, would actually spark $27 billion in lost revenue over that time span, as the new tax policies would mean fewer projects get greenlighted.

On Thursday’s call, Durbin said that the industry is more than open to having policymakers examine the credits and deductions it uses as part of a broader tax reform effort.

But the API executive added that the industry already pays a higher effective tax rate than other sectors of the U.S. economy. “We shouldn’t be singled out in a punitive way for the tax provisions, the standard tax provisions that we have for our business,” he said.