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Proposed Budget Would Harm Oklahoma's Oil & Gas Industry

March 6, 2009

Tulsa - There is growing opposition to a specific part of President Obama's budget plans.

It deals with tax breaks and tax incentives meant to spur oil and gas exploration. Industry experts say the effects here in Oklahoma would be devastating.

There are eight items in the budget, including three tax increases and the repeal of five tax credits. If fully implemented, the taxes would equal 34-billion dollars over ten years.

The tax incentives for the oil and gas industry have been on the books for decades. But now, the Obama administration says they want to do away with them in order to shift the focus to alternative fuel sources.

But, folks we spoke with today say that's not the way to go about it.

Dewey Bartlett, Jr. is President of Keener Oil and Gas Company. He says if the industry's tax incentives are eliminated, it will be devastating for the nation and especially here in Oklahoma.
"It would be a tsunami effect," Bartlett says. "Not just a ripple effect, a tsunami effect."
"The governor should be in DC right now, beating on everyone's door screaming why are you going to do this to my state?"
Dewey Bartlett, Jr.

From decreased exploration and production to tens of thousands in lost jobs to an increase in the cost of fuel and energy.

"And, that means we become more reliant on outside sources," he says.

But, consumer advocates say the financial impact is peanuts, compared to the profits oil companies are earning.

"If they're talking about Exxon, that's a whole different ball game," Bartlett says. "If they're talking about Keener Oil & Gas, it's an extremely important part of my company to stay in business. Our industry pays a huge amount of taxes both directly and indirectly, we employ tens of thousands of people."

And, his business is Oklahoma's business.

"The governor should be in DC right now, beating on everyone's door screaming why are you going to do this to my state?"

Bartlett and a team of local oil men just returned from Washington, DC to lobby against the budget and says they plan on going back in about a month. He says they're going to act fast because the budget could be voted on as soon as April or May.

We also spoke with Congressman Dan Boren by phone today. We wanted to know if the proposed budget would affect the oil and gas industry this negatively. He said 'absolutely' and said he hopes to water it down before it gets voted on.

But, Boren says if it stays the way it is, he will not vote on it.

The tax incentives are not special to the oil and gas industry. There are other industries that rely on them as well, like lumber and mining. But, President Obama's budget does not touch those tax breaks.