Gohmert hopes for 'public outcry'

By Steve Bandy, News Messenger
Thursday, April 16, 2009

Projected changes in the new federal budget will negatively affect royalty owners, producers and, ultimately, the entire oil and gas industry, according to U.S. Rep. Louie Gohmert, R-Tyler.

The proposals include repeals of a number of industry-related tax credits and deductions as well as a new tax on production.

"There are a number of things put in the budget proposal as places that President Obama sees he can get more money to pay for some of the programs he wants," Gohmert said.

Gohmert said the government doesn't seem to understand the economic benefits of drilling in such places as the outer continental shelf and the oil shale deposits in the western states.

"I'm very hopeful of a public outcry just like in September when the speaker wanted to extend the moratorium on offshore drilling," Gohmert said. "I'm hoping there will be a similar outcry as energy costs continue to creep upward. I'm hoping legislators will be afraid of further alienating the people across America and further penalizing the pursuit of our own energy."

Obama's budget plan has already passed through the House of Representatives and still needs to be passed by the Senate.

Gohmert said if all the repeals go through, the domestic oil and gas industry is going to suffer.

"For example, they want to repeal the expensing of intangible drilling and development costs. That's just the cost of producing oil and gas. In any other business, those costs are deductible," Gohmert said.

"We're not giving oil and gas a subsidy, we're just allowing them to deduct what every other business gets to deduct."

Gohmert said the president hopes to raise $31 billion in new tax revenue from a range of different tax proposals, one involving a new excise tax on offshore drilling.

"But they're not allowing any areas out for lease that are not currently under lease," he said.

"There's also an indication in there that the administration wants to utilize a user fee for the oil and gas industry."

Gohmert said there is a provision in the proposal that could immediately affect East Texas.

"They want to have the federal government begin to regulate and tax hydraulic fracking," he said.

"That's how they produce gas in Barnett Shale around the Austin area and in the Haynesville Shale in Louisiana that runs over into East Texas," he said. "If that's done, it will make the process even less attractive to even more companies."

Gohmert explained that he believes the reason for the proposed fracking regulation is that a number of states do not have their own environmental oversight agencies that regulate such activities.

"We have that here in Texas," he said. "We have TCEQ (Texas Commission on Environmental Quality) and the Railroad Commission. I believe there are nine or 10 states that have no such entities."


Mr. Gohmert is a Texas politician, but what he has to say about the proposed budget is of interest to everyone. If you want to be a proactive citizen, now might be a good time to start writing letters to your senators.
If you don't want to compose your own letter, go to PickenPlan.com and use their templates to voice your opinion. However you choose to get it done is up to you. Just make sure you follow through. It's important.