API Outlines U.S. Energy Industry Opposition to Inflation Reduction Act

Source: By Keith Reid, Fuel Market News • Posted: Sunday, August 14, 2022

API Outlines U.S. Energy Industry Opposition to Inflation Reduction Act

The American Petroleum Institute (API) joined with nearly 60 other trade groups representing America’s natural gas and oil industry in opposing the Inflation Reduction Act (IRA) as passed by the Senate. In a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, the organizations outlined problematic provisions, including punitive new taxes and regulatory red tape that undermine the industry’s ability to promote energy security for the American consumer. Here is the letter:

Dear Speaker Pelosi and Leader McCarthy:

The undersigned trade associations, representing thousands of businesses across the United States that collectively employ millions of Americans, write to express our opposition to the Inflation Reduction Act (IRA) as passed by the U.S. Senate. Further, we write to urge you to reconsider policies within the legislation before proceeding.

The United States has experienced its second consecutive quarter of negative GDP growth, and American consumers are facing record high inflation. We share the goal of addressing climate change, as evidenced in the policies we support and in the actions that we take every day. However, the considerable tax increases and new government spending in the IRA amount to the wrong policies at the wrong time.

We are also facing the most significant global energy crisis since the 1970’s, and U.S. energy security—and that of our strategic allies abroad—is being put to the test. Further, U.S. energy costs have increased 40% over the past twelve months, creating a serious strain on American household incomes.

With these current conditions as the backdrop for this legislation, there are several specific policies included in the IRA which are particularly troubling and deserve re-consideration. We would like to draw your attention to three such provisions:

  1. The IRA imposes a new corporate minimum tax, increasing taxes on Americans by more than $300 billion over the next 10 years. As President Obama noted in 2009, “the last thing you want to do is raise taxes in the middle of a recession.”
  2. The IRA imposes an $11.7 billion tax on crude oil and petroleum products. At a time of record-high energy prices, Congress should not add additional costs on American energy companies competing globally.
  3. The IRA imposes additional constraints on the ability of companies to develop and produce the energy that Americans need to fuel our economy and strengthen our energy security. This includes increased fees on domestic production and the establishment of a new $6.3 billion natural gas tax.

Finally, the IRA fails to address permitting reform, which is desperately needed and is essential to effectively deliver affordable, reliable energy to consumers in a growing economy. To date, neither the House nor the Senate have introduced comprehensive permitting reform legislation. We urge Congress to quickly consider and pass permitting reform without delay. For the above-stated reasons, we express our opposition to the IRA and request that you reconsider passage of this legislation.

Signatories of the letter include:

  • American Exploration and Production Council (AXPC)
  • American Fuel & Petrochemical Manufacturers (AFPM)
  • American Petroleum Institute (API)
  • Arkansas Independent Producers and Royalty Owners
  • Arkansas Oil Marketers Association
  • Associated Builders & Contractors West Virginia
  • Associated Industries of Florida
  • Associated Industries of Missouri
  • California Independent Petroleum Association (CIPA)
  • Chemistry Industry Council of Illinois
  • Colorado Oil and Gas Association
  • Colorado Wyoming Petroleum Marketers Association
  • Energy Workforce & Technology Council
  • Florida Independent Petroleum Producers Association
  • Florida Natural Gas Association
  • Florida Petroleum Marketers Association
  • Florida Propane Gas Association
  • Florida State Hispanic Chamber of Commerce
  • Florida Transportation Builders Association
  • Floridians for Better Transportation
  • Fuel Iowa
  • Georgia Association of Convenience Stores
  • Georgia Mining Association
  • Illinois Fuel Retails Association
  • Illinois Manufacturers Association
  • Illinois Retail Merchants Association
  • Independent Petroleum Association of America
  • Kansas Independent Oil & Gas Association (KIOGA)
  • Louisiana Association of Business and Industry
  • Louisiana Oil and Gas Association
  • Manufacture Alabama
  • Michigan Association of Convenience Stores
  • Michigan Oil and Gas Association
  • Michigan Petroleum Association
  • Minnesota Service Station & Convenience Store Association
  • New Mexico Business Coalition
  • New Mexico Oil and Gas Association
  • North Carolina Chamber
  • North Carolina Petroleum & Convenience Marketers Association
  • North Dakota Petroleum Council
  • Ohio Energy and Convenience Association
  • Ohio Manufacturers Association
  • Ohio Oil and Gas Association
  • Pennsylvania Chamber of Business & Industry
  • Pennsylvania Grade Crude Oil Coalition
  • Pennsylvania Independent Oil & Gas Association (PIOGA)
  • Pennsylvania Independent Petroleum Producers
  • Pennsylvania Manufacturers Association
  • Permian Basin Petroleum Association
  • Petroleum Association of Wyoming (PAW)
  • Plumbing-Heating-Cooling Contractors—National Association
  • South Dakota Petroleum and Propane Marketers Association
  • Texas Alliance of Energy Producers
  • Texas Independent Producers & Royalty Owners Association (TIPRO)
  • The Coalbed Methane Association of Alabama
  • The James Madison Institute
  • The Petroleum Alliance of Oklahoma
  • West Slope Colorado Oil & Gas Association