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Tax Credits Keep Oil Wells Pumping

Larry J. Richardson | Wichita Eagle
Aug 18, 2013

Richardson, Derby, KS, is a petroleum geologist.

How about this for achieving energy security and lower consumer costs? America’s marginal oil wells – wells that yield on average only 2.2 barrels of oil per day – produce oil equivalent to 50 percent of the amount imported from Saudi Arabia.

Kansas has the third-largest number of marginal wells, also known as stripper wells, behind Texas and Oklahoma. But the Obama administration wants to repeal tax credits that would discourage the use of marginal wells, a source of one-fifth of the nation’s oil production. That would harm our energy security and, according to a Wood Mackenzie study, place at risk 165,000 U.S. jobs.

Almost all of the nation’s marginal wells are operated by small, independent oil companies or family businesses. Eliminating the same tax deductions that are available to every business in America would force companies and family businesses to pay more in federal taxes, which are already far higher than for most other industries.

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