Oil industry pays billions in taxes

April 26, 2008

Last year, the U.S. oil and natural gas industry delivered record amounts of fuel to American consumers. It also invested more than $180 billion in new oil and gas and alternative energy projects.

The year before that (the latest year for which numbers are available), it paid more than $90 billion in income taxes with an effective tax rate nearly twice the average rate for all other manufacturing industries.

This record doesn't justify changing the tax rules for oil and gas companies, which is what Jeffrey Hooke advocates in his column "Say no to Big Oil" (Commentary, April 22).

Mr. Hooke fails to grasp that more taxes would do nothing to increase production of oil and gas, which is one thing that could help consumers.

He ignores U.S. government restrictions that hamper increased oil and gas production at home.

Finally, he seems unaware that his tax proposals would hurt the tens of millions of Americans who hold oil company stock in their IRAs or 401(k) accounts or draw pensions from government retirement funds invested in oil company stocks.

John Felmy

Washington

The writer is chief economist for the American Petroleum Institute.

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