Murkowski says administration's budget will drive energy producers overseas
WASHINGTON, D.C. – U.S. Senator Lisa Murkowski, R-Alaska, today raised concerns about the impacts of President Obama’s 10-year budget blueprint on domestic conventional energy production.
“President Obama and I agree that we need to do everything we can to encourage development of renewable and alternative sources of energy,” Murkowski said. “Even under the most optimistic projections, however, America will continue to depend on conventional sources of energy for decades.”
The administration’s budget would increase domestic oil and gas companies’ cost of doing business by at least $31 billion over the next 10 years through a combination of new fees, taxes, and other regulatory shifts, including:
- A new excise tax on Gulf of Mexico oil and gas production to effectively cap royalty relief for previously issued leases ($5.3 billion)
- Repeal expensing of intangible drilling costs, which could make domestic projects less competitive with foreign projects ($3.4 billion)
- Repeal manufacturing tax deduction for oil and gas companies, which could shift investment overseas by making domestic products even less competitive ($13 billion)
The budget also requires the Department of the Interior to ensure companies are "diligently" developing their existing leases or risk losing them. This was a very partisan debate last summer, and could apply damaging “use it or lose it” requirements to leases issued in Alaska’s NPR-A.
“These punitive provisions will raise revenues for the federal government, but they won't increase the energy security of the United States,” Murkowski said. “This represents an attempt to drive the oil industry overseas through a combination of breaching past agreements the government has made with oil and gas producers, and making future production more difficult and expensive.”
“Instead of declaring war on the domestic production of conventional energy – as I believe the president’s budget does – we need to focus on how we can use our abundant domestic resources of oil, natural gas and coal in the cleanest, most environmentally friendly way possible for the sake of our nation’s economy, our nation’s security and the world’s environment,” Murkowski said.
Murkowski also expressed concern over the lack of nuclear power in the budget proposal, especially as Congress takes on the challenge of tackling global climate change.
“The president’s proposal ignores the single largest source of carbon-free energy we have,” Murkowski said. “Expanding nuclear power can help both meet our growing energy demand and create high-paying jobs.”