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)