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Oil and gas industry's contributions to society exaggerated, watchdog group says

Industry takes credit for contributing $86 million a day to the federal treasury

A fiscal watchdog group this week accused the American Petroleum Institute and others of exaggerating the contributions made by the oil and gas industry to the federal government.

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Stephen Ellis, vice president of Taxpayers for Common Sense, said the industry, in taking credit for contributing $86 million a day to the federal treasury, is including in its figure royalty payments, which are made to the federal government for the right to develop oil resources.

"Yup, just like I 'contribute' to the gas station every time I fill up my car," Ellis said. "A royalty - which makes up the vast majority of that total - is a payment made in exchange for a good. ... A royalty is not a tax." The industry has been fighting proposals by congressional Democrats and the Obama administration to end some oil and gas tax breaks to help reduce the deficit, arguing that at a time of high industry profits they can't be justified.

API strongly disputed Ellis' critique. "Stephen Ellis with Taxpayers for Common Sense is dead wrong on the facts about oil and natural gas industry taxes," said Stephen Comstock, tax policy manager for API. "Contrary to what Ellis says, the industry's 41 percent effective tax rate, which is far higher than most businesses, includes only income taxes associated with company operations, and the $86 million in revenues it pays to our federal government every day is mostly income tax, almost 62 percent of it."

Bruce Alpert can be reached at balpert@timespicayune.com or 202.857.5131. Jonathan Tilove can be reached at jtilove@timespicayune.com or 202.857.5125.



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