By JONATHAN FAHEY. The Associated Press. Motorists nationwide are paying nearly $4 for a gallon of gasoline as the oil industry reaps pre-tax profits that could hit $200 billion this year.. This makes another big number hard to take: $4.4 billion.. That's how much the industry saves every year through special tax breaks intended to promote domestic drilling.. President Barack Obama is increasing pressure on Congress to eliminate these tax breaks -- including one that is nearly a century old -- at a time of record budget deficits. The president and congressional Democrats say eliminating the tax breaks will also lower gas prices by making alternative energy sources more competitive.. Oil industry advocates, a group that includes most Republicans in Congress, argue just the opposite. They say oil companies reinvest tax breaks into exploration and production, which ultimately generates more tax dollars and increases the supply of oil. They say eliminating tax breaks will raise the cost of doing business and lead to higher gas prices.. Asked about these tax breaks Thursday at a Senate finance committee hearing, executives of the five biggest oil companies defended them.. "Tax increases on the oil and gas industry -- which will result if you change long-standing provisions in the U.S. tax code -- will hinder development of energy supplies needed to moderate rising energy prices," said Chevron chief executive John Watson. "It will also mean fewer dollars to state and federal treasuries . . . and fewer jobs -- all at a time when our economic recovery remains fragile.". The 41 U.S. oil and gas companies that break out their federal taxes said they paid Uncle Sam $5.7 billion in 2010, according to data compiled by Compustat. That's more than any other industry. Exxon alone paid $1.3 billion. (The company's total tax bill was $21.5 billion, but most of that was paid to foreign governments and states.) But at a time when motorists are fuming about $4 gas, Obama and Democrats see a huge political opportunity.. "When you see profits that include the word billions, people automatically think someone is getting ...[ripped off]," says Christine Tezak, senior energy and environmental policy analyst at Robert W. Baird & Co. "The fact that the . . . [oil industry] is getting any breaks at all has become a sore spot.". The price of oil is so high that removing these tax breaks would likely have little to no effect on domestic oil production. There are other factors that make the U.S. a highly attractive place to drill: It's politically stable, it has good roads and pipelines, and it's the world's biggest energy consumer. And the industry would remain hugely profitable even though eliminating the tax breaks would increase its U.S. tax bill by nearly 70 percent.. The tax breaks, if they remain as they are, will cost the U.S. Treasury $44 billion over the next decade. A Senate proposal targets many of the same rules, but would eliminate them only for the five biggest oil companies: Exxon Mobil, Chevron, BP, Royal Dutch Shell and ConocoPhillips.. Here is a look at the main tax breaks:
What's in NUMC's future? ... Pool safety tips ... LI Works: Selling seafood
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Updated 4 minutes ago Nassau fails to comply with ICE deadline ... What's in NUMC's future? ... Remembering Dolly Parton ... Explore the Cold Spring Harbor Fish Hatchery
What's in NUMC's future? ... Pool safety tips ... LI Works: Selling seafood
Credit: Newsday
Updated 4 minutes ago Nassau fails to comply with ICE deadline ... What's in NUMC's future? ... Remembering Dolly Parton ... Explore the Cold Spring Harbor Fish Hatchery
