Depletion allowance.

Have you ever heard the term "depletion allowance"? No? No wonder. You are not supposed to have. What you have heard is Obama railing about big oil company "subsidies," four billion dollars per year of them. In truth, unlike the billions in true subsidies being given out annually to ethanol, wind, algae, and solar projects, oil companies get an annual tax adjustment known as a depletion allowance. Oil companies, as well as timber, mineral mining, and coal companies, are involved in extractive (Webster: "tending towards or resulting in withdrawal of natural resources by extraction with no provision for replenishment") operations of their reserves. Depletion of these reserves without replenishment would result in the companies going out of business. Accordingly, early in the 20th century, Congress provided that 22.5 percent of oil company revenues would be tax exempt in order that their reserves could be replenished by drilling to discover new fields. This exemption was termed a "depletion allowance," and has since been reduced to its present value of 15 percent.

What Obama and the liberal establishment want is for this 15-percent depletion allowance to be repealed so that that revenue can be taxed. Such action will certainly not help in the replenishment of reserves. The price of oil will have to be increased and passed on to us consumers. This tax increase is just the opposite of the handout subsidies that are being given to the money losing so-called green energy industries.

KEN CAREY

Canon City, Colorado