Obama and many Democrats want to strip $4 billion in annual tax breaks given to oil-and-gas companies. Some of the proposals have targeted only the largest firms, while others would also hit smaller, independent producers.
The White House has ramped up calls to end the incentives in recent weeks as part of a deal to replace automatic spending cuts that went into effect March 1.
But API has long called the incentives cost-recovery mechanisms and business deductions that other sectors receive. It says the federal government would single the oil-and-gas industry out by blocking it from such tax treatment.
Durbin said erasing the oil-and-gas industry’s ability claim the various tax items would deter investment in the United States. He said the drop in long-term federal revenues would outweigh any short-term gains.
“Higher energy taxes undermine development,” Durbin said.
Durbin reiterated API’s willingness to discuss the tax breaks in the context of broad tax reform. He didn’t elaborate on any concessions the industry might make.
Durbin said he felt Capitol Hill sentiment was swinging in the oil-and-gas industry’s favor, noting fewer legislative proposals to nix the tax provisions were making the rounds.
He attributed that to the oil-and-gas industry’s recent domestic success, in which the U.S. energy boom has added jobs and bolstered the nation’s export prospects.
“I do think that part of what we’ve been focused on over the past several years is to remove some of this polarization,” Durbin said.