Natural Gas Industry and Consumers Could be Hurt
by Proposed Tax Changes Says the AGA

March 6th, 2009 • Filed Under
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Staff Reported

WASHINGTON D.C. - The American Gas Association warned this week that the changes to oil and gas tax laws proposed by the Obama administration would hurt both natural gas consumers and producers. That means states like Wyoming, Colorado and Utah which are home to major natural gas drilling operations, could be significantly impacted.

The association contents that the administration’s federal budget proposal would discourage independent producers from discovering and recovering domestic gas. The AGA, which represents the country’s gas utilities, contends this would happen if changes are made to the tax laws that address intangible drilling costs, geological and geophysical expenses, percentage depletion, and the deduction for U.S. manufacturers.

David N. Parker, the AGA President, noted that “When supply
shrinks and can’t keep pace with demand, prices must rise. The
171 million Americans who rely on gas to heat their homes and
cook their food could see higher energy bills should these
provisions pass. That would put an even greater burden on
consumers.”

Parker added that the administration’s proposals not only would
reduce domestic gas supplies but also eliminate many
well-paying jobs and create a serious potential for upward
price swings.

“Right now, natural gas utilities are able to deliver clean,
domestic natural gas to customers at reasonable prices. With
the economy in the doldrums, now is not the time to increase
the price of natural gas to consumers,” he explained.

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