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CALL TO ACTION MEMO
Memo to: All Members
From: Bill Goodwin
Subject: Obama's Tax
Date: March 16, 2009

During the March 12th Board of Directors Meeting, I was asked to draft a letter for TOGA member employees to send to their Congressmen and U.S. Senators, encouraging them to oppose President Obama's proposed budget. The budget would eliminate tax mechanisms crucial to raising capital for drilling.

Obama proposes eliminating expensing intangible drilling costs (IDC), repealing the manufacturers' tax for deduction for oil and gas companies, percentage depletion, the enhanced oil recovery credit, marginal well tax credit and the passive loss for working interests in oil and gas properties.

The Independent Petroleum Association calls it a "devastating blow to the American Oil & Gas Industry."

We all know that without tax credits, we can't raise money for drilling. One oil and gas association noted that this all came about because the Obama Administration is inexperienced in understanding our industry.

Unfortunately, that is not true. The Obama Administration knows exactly what it is dong. It is trying to do away with the domestic oil industry. Obama's tone in introducing the tax proposal in his budget showed he understands our industry and wants it to cease to exist.

He noted "The oil and gas era is waning, and the government has to turn its incentives toward renewable energy forms such as wind and solar power."

Obama's budget states "The last administration's approached our energy needs by focusing on finding more and more of the fossil fuels we use now. As a result, we are still addicted to fossil fuels and more dependent on foreign oil than ever before. We have yet to make important policy changes and critical investments in the clean energy infrastructure that we'll need to transform our economy."

Reading between the lines, Obama is saying, "I have the wind at my back on this. I can say I am taking away tax breaks for big oil. Everyone applauds. Only bankers are liked less than big oil. Obama is aware that if there is no drilling, no new oil or gas production will be brought on line. In a few years prices will soar again. He will be able to say, "Big oil is at fault. See, they didn't need tax breaks to make millions." What he is trying to do is to force feed Americans into embracing alternative energies now, knowing they are years away from being ready.

In the meantime, we have a fight on our hands, with few allies. A handful of national Oil and Gas organizations and about a dozen state oil and gas associations have joined forces to battle a very popular new President and hundreds of environmental, anti-business and other organizations ready to punish big oil for $4 gas.

What can we do?: We need for everyone in our industry from tool pushers to pumpers, from accounts to rough necks to write to our congressmen and let them know we oppose this legislation and why We are fighting for our lives and need their help now. A sample letter and list of Congressional offices is attached. (*list is coming shortly)