NGC: Tax proposals would harm gas industry
OGJ Washington Editor
WASHINGTON, DC, Mar. 18 -- The Obama administration's proposed tax law changes would seriously damage a domestic gas industry, which is hurting already, the Natural Gas Council warned in a Mar. 17 letter to members of Congress.
The group, which is comprised of trade associations involved in the US gas industry from wellhead to burner tip, explained that investments in new US gas production come from three funding sources: selling the gas, obtaining credit from lenders, and securing private and institutional investors willing to commit capital to high-risk ventures.
"Unfortunately, new US natural gas projects are at risk. Dramatic reductions in natural gas prices this past year have reduced cash flow to producers, while the credit crunch has limited access to capital, and investors are more cautious than ever," the letter continued.
It said the White House's tax proposals, outlined in its proposed fiscal 2010 federal budget, would radically shift incentives for developing domestic gas, some of which have been in place since 1913. More...