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Guest column: Taxes on domestic oil won't help energy woes - Friday, August 31, 2007
By DOUG MOOD

Whether an elected official is a state representative, a governor or a U.S. senator, the daily concerns of - and the vested interests of - their constituents should be uppermost in their mind. In light of his recent stand on solving America's energy problems, one can't be sure that Montana Sen. Max Baucus understands that.

There are two major (and related) problems on the fuel side of energy policy that this country urgently needs to address. First is the unacceptable dependence on foreign oil. Second, while fuel prices continue to fluctuate on a seasonal basis, the trend line for those prices unquestionably is going up. It is impossible to get used to dropping $50 to $75 for a tank of gas.

While we are making important advances in developing alternative energy sources, oil is not going to be replaced any time soon. Placing punitive new taxes on American oil production does nothing to advance the goals of increased energy independence and reasonable prices.

Yet Baucus sponsored an amendment to a recent energy bill that would have done just that. His amendment would have added $32 billion in new taxes to the cost of energy produced in the United States. A major portion of that $32 billion was a new 13 percent excise tax on oil and gas from the Gulf of Mexico. Rest assured that whether a tax is added at the gas pump or added to the price at the wellhead, ultimately it is paid by the gas consumer, you and me.

Thankfully, a majority of his fellow senators disagreed with Baucus' amendment and voted it down. Unfortunately, the House, in their version of the energy bill, approved new energy taxes similar to those sponsored by Baucus.

We simply do not need more taxes on domestic energy production. If anything, we should be reducing the tax burden on domestic oil production in order to increase domestic production and reduce dependence on foreign oil. Clearly, that is in the best interests of the U.S. on numerous fronts.

Piling more taxes on American production increases domestic costs but doesn't affect foreign competition. It clearly makes foreign fuels more attractive to the U.S. market. Exactly the opposite of where we ought to be going.

There are now two versions of this important energy policy legislation, one in the House and one in the Senate. That means the two versions will have to be reconciled in a joint conference committee of the House and Senate. Whether Baucus' new taxes will be included in the final version is a decision that will be made by the conference committee.

If you agree that we need to encourage domestic oil production and we need to have that production available at affordable prices, without new taxes getting in the way, take the time to communicate with your Montana congressional delegation and let them know where you stand.

Doug Mood of Seeley Lake is the vice chairman of the Montana Public Service Commission.


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