Begich Opposes Democrats’ Efforts to End Oil & Gas Subsidies
U.S. Sen. Mark Begich today said he will fight an effort by some Senate Democrats to end incentives for domestic energy production. Begich is responding to a letter sent by several Senate Democratic senators to House Speaker John Boehner calling for ending subsidies and tax breaks for oil companies.
"While I recognize the need to focus on reducing the deficit, eliminating incentives for energy companies to the tune of $30 billion threatens our energy and national security. It would cost thousands of jobs in Alaska and across the country," Begich said. "Energy companies are among the businesses investing and creating jobs at a time when our country needs both. I will fight any measure that ends these incentives."
Specifically, Begich is concerned about the proposed elimination of Intangible Drilling and Development costs (IDC) and percentage depletion. IDC has been a part of the tax code since 1913 and eliminating it would remove more than $3 billion invested in domestic production.
Similarly, percentage depletion, an accounting measure for the decline in resource values produced from a property, has been allowed since 1926. It is particularly important for smaller, marginal wells owned by American owned- independent oil and gas companies. Percentage depletion makes production feasible on wells that account for nearly a third of domestic production.
"Congress needs to focus on cutting waste, not putting an industry on the chopping block that is critical to our economy and to creating jobs," Begich added.