Study: Obama oil tax raises more questions than answers

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, R-Alaska, on Thursday released the study conducted by the Congressional Research Service, Congress’ nonpartisan research arm.

Murkowski released the study ahead of a hearing she held Thursday morning on the Energy Department’s budget request, underscoring that the president’s budget is raising concerns over the proposed $10.25 per barrel tax on oil, while cutting the budget for low-income heating assistance that her states’ poorer residents rely on to get through Alaska’s cold winters.

The research arm had released a previous report that showed the fee would drive up energy prices. The new study outlines eight areas where the administration has been ambiguous on how the tax would be instituted.

“We don’t even know if the administration’s own math works out,” Murkowski said.

“We have astonishingly few details about the president’s proposal, and the few details we do have all suggest that this tax or ‘fee’ would further imperil the American energy renaissance,” she said. “This report will not be the last as I continue to examine the potential impact of such a harmful policy that, whatever the details may be, is certain to harm domestic energy production.”

The eight points of ambiguity include:

• The proposed tax is counted as revenue until 2026. But it doesn’t demonstrate the basis of its projections and what quantity of oil would be in use in a decade.
• It is not clear which oil companies would be affected and if a distinction would be made between big and small companies.
• The oil fee would be adjusted for inflation and phased in evenly over a five-year period beginning Oct. 1. However, the method for inflation adjustment is not specified.

• It does not explain where the tax would be collected, whether at the point of oil production, point of entry into the U.S., the refinery or at some other point.