Who really pays the price of

new energy taxes?

We all do, in more ways than one.

Given current high prices of oil, there’s Why? Taxes reduce available funds
a predictable political question: should we these companies can reinvest in additional
“penalize” oil and natural gas companies exploration, production, and refinery
with new taxes? capacity as well as in new technologies
Here are a couple of facts that might vital to supplying the future energy needs
surprise you: of our nation.
• Oil and natural gas companies pay income Oil and natural gas companies have
taxes averaging 40% of their pre-tax been doing their part to prepare for the
income. That is nearly double the average future – investing more than $1.25 trillion
rate paid by all companies in the since 1992 in a wide range of capital
manufacturing sector, according to improvements. Massive investments are
American data on the nation’s top 27 energy essential to developing additional supplies
consumers companies tracked by the U.S. for America’s energy needs.
require Energy Information Administration. The oil and natural gas industry
reliable, • These 27 energy companies were employs 1.8 million hard-working

growing responsible for $90 billion in income Americans, and more than 4 million other

energy taxes in 2006. And they constitute jobs are indirectly attributable to oil and
gas activities. Many of these good jobs that
supplies just part of the nation’s oil and
natural gas industry*. today support millions of American families
The better question is this: what would be at risk, if new taxes stifle the
is the effect of increasing already high industry’s growth and development.
taxes on oil companies? The bottom line is this: raising
The government projects a need for taxes on oil companies could actually
21 million barrels of oil per day and a make matters worse for businesses and
substantial rise in natural gas consumption consumers already feeling the effects
by 2030. America cannot function without of higher energy costs rippling through
reliable supplies of these resources, yet the economy. And higher taxes will likely
increasing taxes on the oil companies that produce less energy, not more – making
find and produce them will likely result in America’s energy future less secure.
less U.S. investment, making U.S. supplies
even scarcer and America’s economy
less secure.

* These companies accounted for 44 percent of U.S. crude and natural gas liquids production, 43 percent of
U.S. natural gas production, and 81 percent of U.S. refining capacity in 2006 © 2008 API

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