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Industry earnings good for jobs and government revenue

Hydrocarbon Engineering,

John Felmy, the API’s Chief Economist told reporters on Tuesday 24th April that when the US oil and gas industry is reporting solid earnings it means jobs are being created and more revenue is being generated for the government.


Comments from Felmy

‘If first quarter earnings are solid, it will be a positive sign for American workers, for American retirees, and, in particular, for Uncle Sam, which is desperately in need of the massive revenue our industry has been providing.

‘In 2011, the three companies paying the largest share of income taxes in the US were oil and natural gas companies. They paid almost US$ 55 billion, and paid at higher effective rates than all other companies. They also paid at substantially higher rates than the US federal statutory rate.

‘Unfortunately, calls for higher taxes on the industry often accompany the release of earnings reports. Higher taxes are a bad idea, not only, because they would be discriminatory and punitive, but also because they would hurt investment, hurt jobs, hurt future financial performance and, after a few years, decrease the revenue our industry delivers to the government.

‘Instead for raising taxes, if we committed to a strong program of domestic development, we could in 2030 create as many as 1.4 million jobs, generate US$ 800 billion in additional revenue, and substantially boost US oil and natural gas production, according to a study last year by Wood Mackenzie. In just seven years, as many as 1 million jobs could be created.

‘Our industry is successful, our nation shares in and benefits from that success. We need to remember that when earnings are released.’

Adapted from a press release by Claira Lloyd

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