Energy Sector Disagrees With U.S. Inflation Reduction Act

Along with over 60 other trade groups representing America’s natural gas and oil industry, the American Petroleum Institute (API) has come out in opposition to the Inflation Reduction Act (IRA) as it was approved by the Senate.

The organizations highlighted the problematic aspects in a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy. These include punitive new taxes and regulatory red tape that restrict the industry’s capacity to promote energy security for American consumers.

Read the full letter below.

“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 1970s, 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 to 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,” the letter said.

Original source material for this article taken from here