Energy and Taxes

America needs American energy.

Natural gas and oil provide 65 percent of America's energy needs.

When the sun doesn’t shine, and the wind isn’t blowing, natural gas keeps the lights on.

American natural gas provides roughly 85 percent of America's natural gas needs; most of the rest comes from Canada.

Oil is a different story; America only provides 35 percent of US needs - but the more it can provide, the less Americans must pay for oil from foreign nations (foreign economies).

Independent producers, that’s us, and thousands of other small family and locally owned business, are hard working Americans, striving to farm home grown energy. Independents are essential to providing American natural gas and oil. These independents develop 90 percent of American wells, produce 82 percent of American natural gas and produce 68 percent of American oil.

Over the past several years independents have been reinvesting 150 percent of US cash flow back into new US production. Independents get their capital three ways - from selling their natural gas and oil, from obtaining credit and from investors willing to invest capital in high risk ventures.

The dramatic swings in prices of natural gas and oil are challenges that the independents recognize and respond to, like any good business they adapt and overcome. Projects that were economic ventures at $10 are in a holding pattern at $5. The credit crunch obviously limits access to capital. Investors are cautious, banks are even more cautious. This reality is already constricting activity (and available supply). The Obama Administration's signals to the energy industry are scary. They cut into the core of a uniquely American industry that has been serving the nation since the 1880’s.

The Obama Administration tax proposals will radically shift investment incentives for development of American natural gas and oil - changing policies that have been in place since 1913 in some cases. Let's be clear - it will mean less American natural gas and oil, it will mean more quality job losses and it will result in increased costs for basic public utilities, for everyone.

These results run counter to the Obama Administration's own agenda of cleaner energy and less foreign oil dependency. The proposed changes are unjustified to energy tax policy and we oppose them vehemently. We STILL need to develop rational national energy strategies - strategies that rely on American energy first, including American natural gas and American oil.

Over our careers here, our discoveries, principally in Ohio, are 80% natural gas and 20% oil. Energy produced through the hard work of Ohioans in support industries too numerous to note here, from Ohio farms and lands, sold in Ohio, and in most cases consumed in Ohio. Ohio is experiencing a steady decline in production in recent years, and so for Ohioans, the financial burdens will be particularly costly, funding for new wells will be more scarce, production declines will accelerate as fewer wells are drilled to replace depleting reserves. Ohioans will be forced to purchase more and more energy resources from other states and other markets, with an assuredly increased cost.

The wrong policy shift, at the wrong time, and bad for Ohio.

Ohio needs Ohio’s energy.

ExxonMobil does not drill or operate wells in Ohio, Ohioans do. The Ohio oil and gas industry is driven by small, locally and family owned independent businesses, not Big Oil. Please help your friends and colleagues understand this clearly, demand that our representatives explain to us what the realized cost of the loss of jobs, activity, and home grown Ohio energy will mean to us, and why it is a sacrifice worth making at this time when the American economy needs plentiful energy to help claw back to relevancy.

Conservation is at the foundation of the energy business - it simply is. Conservation is also an obvious component to the solution of the energy problem. The natural gas and oil industry is a quintessential American industry, as American as apple pie and baseball. Small family and locally owned businesses, in your communities, your neighbors. Unfortunately, carpet bombing an ultimate American industry, which will affect the American way of life in a plethora of ways, to follow the idealistic idea that it will save the world, is simply wrong.

For more information on the plight and perspectives of the American Independent, visit www.ipaa.org.