CORRECT: Obama Not Backing Off On Gulf of Mexico Drilling Tax
("=Obama Appears to Back Off On Gulf of Mexico Drilling Tax," published at 10:
25 a.m. EDT, incorrectly concluded that the omission of a proposed $5 billion
excise tax on oil and gas production from the Obama administration's budget
meant that the White House appeared to have dropped plans to push for the tax in
the first two paragraph. The correct story follows.)
By Siobhan Hughes
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Obama administration is sticking with a plan to
raise about $5 billion over 10 years through a new excise tax on oil and gas
production in the Gulf of Mexico out of its proposed fiscal 2010 budget, a
senior administration official said Thursday.
The comment came after the White House released new details of a budget that
showed it is also sticking with other plans to eliminate $26 billion in tax
breaks for oil and gas companies. Half of that would come from eliminating a tax
break for domestic oil and gas production. Companies say the tax measure keeps
jobs in the U.S.
"Oil and, to a large extent, gas are internationally traded commodities and
their prices are determined on the world market," the White House said in
justifying the tax plans. "As a result, domestic oil and gas production
subsidies do not significantly reduce the prices that consumers pay for products
such as gasoline and home heating oil, resulting primarily in higher returns to
the oil industry."
On the Gulf of Mexico, Democrats have been battling oil companies to get
royalty payments from Gulf of Mexico leases signed in the late 1990s, during
years when the government, some say accidentally, left price triggers out of
contracts. Government auditors say that the omission could ultimately
shortchange taxpayers by billions of dollars. The U.S. and the companies haven't
been able to agree on a deal. The Obama administration's proposed excise tax
would have raised money without directly addressing the issue.
The White House also proposed repealing an Energy Department oil research and
development program established under a 2005 law. The research and development
activities "typically fund development of technologies that can be
commercialized quickly, like improved drill motors, which should instead by
funded by the companies that benefit from the projects," the White House said.
Solar energy and cellulosic ethanol would be encouraged, with the Energy
Department seeking to bring the cost of solar electricity down so that it is on
par with the costs of other energy by 2015. The Energy Department also said that
it aims to make the price of cellulosic ethanol competitive with comparable
types of fuel by 2012.
The Obama administration wants to fill the country's strategic petroleum
reserve to its capacity of 727 million barrels in early 2010. In 2009, the
Energy Department plans to use $563 million in available balances to buy more
oil and will "continue to fill using federal royalty oil until the existing 727
million barrel capacity is filled in early 2010."
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; siobhan.hughes@
dowjones.com
(END) Dow Jones Newswires
05-07-091812ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|