Printer Friendly

OIL PRODUCERS ASK PRESIDENT TO RECONSIDER BTU TAX

 SACRAMENTO, Calif., March 2 /PRNewswire/ -- The California Independent Petroleum Association (CIPA) announced today that while it supports President Clinton's objective of deficit reduction, the proposed level of additional taxation on the oil and gas industry would cost America jobs and increase the country's dependence on foreign crude oil.
 "We wholeheartedly endorse the concepts of curbing the federal deficit, creating jobs, encouraging energy conservation and reducing government spending," said David Kilpatrick of Santa Fe Energy Resources, president of CIPA. "But California's independent producers simply cannot absorb the additional costs being proposed under the president's BTU tax."
 Almost 70 percent of California's oil production is low gravity, heavy oil, which results in the highest lifting costs in the nation, and sells at a significant discount compared to other crude oils. And independent producers, unlike major integrated oil companies, have no refining or retail marketing outlets. Independent producers' sole source of revenue is the production -- lifting -- of oil and gas from the ground. They have no control over the prices they receive for their production, and they have no means for "passing on" new taxes or costs. The proposed BTU tax of $3.47 per barrel of oil equates to almost 30 percent of the current posted price for California heavy oil. The proposed natural gas BTU tax of 26 cents per mcf is almost 15 percent of the sales price for natural gas. And natural gas is a key component of a producer's costs since it is used as a fuel to create the steam necessary to recover heavy oil. The cost for California producers to produce heavy crude oil could easily increase by 50 cents to $1 per barrel due to the proposed BTU tax levied on natural gas alone.
 With today's prices causing many fields to already be only marginally economic, if the proposed BTU tax was to be borne by the producer, lifting costs would increase, wells and fields would be shut-in, reserves would be abandoned and jobs would be lost permanently.
 If the tax is determined necessary for deficit reduction, CIPA officials encourage the administration to reconsider the point at which the proposed BTU tax would be assessed, with the objective being to levy the tax at the consumption level, and exempt all fuels used in the oil production process. Additionally, they request consideration be given to a fee levied on all imported crude oil and petroleum products, which would create jobs, reduce the deficit, encourage conservation and reduce America's dependence on foreign crude oil.
 The California Independent Petroleum Association represents more than 650 independent crude oil and natural gas producers and petroleum service and supply companies in California. Independents account for more than 20 percent of the state's daily crude oil production, and according to state Department of Conservation figures, the production segment of the industry provided almost 71,000 jobs with payrolls exceeding $2.7 billion in 1990.
 -0- 3/2/93
 /CONTACT: David Kilpatrick, president, 805-322-3992 or Daniel Kramer of California Independent Petroleum Association, 916-447-1177/


CO: California Independent Petroleum Association ST: California IN: OIL SU:

JB-KJ -- LA028 -- 2080 03/02/93 15:25 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 2, 1993
Words:519
Previous Article:SKYLINE OPTIONS NEWLY DISCOVERED PORPHYRY DEPOSIT IN MEXICO
Next Article:VENEZUELAN GOLDFIELDS LTD. COMMENTS ON PRESS RELEASE
Topics:


Related Articles
DOMESTIC PETROLEUM COUNCIL ISSUES STATEMENT TO CONGRESS CONCERNING MARKEY/SCHEUER AMENDMENT TO H.R. 776
AMERICAN PETROLEUM INSTITUTE ANALYZES BTU ENERGY TAX PROPOSAL
ARCO CHAIRMAN ANNOUNCES SUPPORT OF PRESIDENT'S CORPORATE TAX INCREASE, CONCEPT OF BTU TAX ON ENERGY
ASHLAND OIL: PROPOSED BTU TAX WILL HAVE NEGATIVE IMPACT ON U.S. ECONOMY, DOMESTIC REFINING INDUSTRY
AMOCO CHAIRMAN SUPPORTS GOVERNMENT SPENDING CUTS AND CALLS FOR COOPERATIVE EFFORT TO AID ENVIRONMENT
PETROLEUM MARKETERS CALL FOR ELIMINATION OF 'ANTI-OIL' BIAS IN ENERGY TAX PROPOSAL
AMOCO CHAIRMAN SAYS CUT SPENDING TO CUT DEFICIT, USE BROAD-BASED CONSUMPTION TAX, NOT ENERGY TAX
PMAA PRAISES CLINTON ADMINISTRATION FOR ACTION ON HEATING OIL TAX
ENERGY SECRETARY O'LEARY AND KEY MEMBERS OF CONGRESS FOCUS ON FUTURE OF THE DOMESTIC PETROLEUM INDUSTRY AND PROPOSED ENERGY TAX
CONSOL Energy Elects Mills to Board.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters