OIL & GAS SUBSIDIES: $6 BILLION
Allows “geological and geophysical” costs associated with oil exploration to be written off faster than present law, costing taxpayers over $1.266 billion from 2007-2015. The provision claims to raise $292 million from 2005-06, and cost taxpayers $1.266 billion from 2007-2015. It originated in the House (there was no such provision in the original Senate bill). Record-high oil prices should provide a sufficient incentive for oil companies like ExxonMobil to drill for more oil without this huge new tax break.
Allows owners of oil refineries to expense 50% of the costs of equipment used to increase the refinery’s capacity by at least 5%, costing taxpayers $842 million from 2006-11 (the estimate claims the provision will actually raise $436 million from 2012-15). This provision was added by the Senate. Record high prices for oil and gasoline, and record profits by refiners like ExxonMobil and Valero should provide all the incentive needed to expand refinery capacity without this huge tax break.
This tax break allows natural gas companies to save $1.035 billion by depreciating their property at a much faster rate. This tax break makes no economic sense, as natural gas prices remain at record high levels, and these high prices—not tax breaks—should be all the incentive the industry needs to invest in gathering and distribution lines.
Allows oil companies drilling on public land to pay taxpayers in oil rather than in cash.
Waives royalty payments for drilling for some natural gas in the Gulf of Mexico.
Waives royalty payments for drilling in offshore Alaska.
Waives royalty payments for gas hydrate extraction on the Outer Continental Shelf and public land in Alaska.
Allows oil companies drilling in federal land off the coast of a particular state to pay the state 44 cents of every dollar it would have paid to the federal government for the privilege of drilling on federal land.