Oil exec warns taxes

A top US oil industry figure warned Tuesday that the country's energy renaissance could be threatened by "punitive" tax policies on oil and gas exploration. With the US government looking to remove tax breaks for big oil firms to help boost government revenues, Jack Gerard, the head of the American Petroleum Institute urged Washington to pursue policies favorable to energy production. "The first, most important thing is to do no harm," Gerard told a roomful of policy makers, lobbyists and reporters in a luncheon speech. "We pay more than our fair share." Gerard, whose organization represents large oil and gas companies, emphasized that domestic energy production has been a bright spot in a weak economy and that there is potential for more growth ahead, if Washington plays its hands right. His address comes during a lull between major policy battles on fiscal issues. The oil industry, which has been targetted in the past by tax proposals in Congress, fears it could end up on the losing end this time around too. Gerard defended key tax measures that benefit the oil industry such as tax deductions for preparatory work on oil and gas wells. He highlighted the potential for North America to become energy self-sufficient if it develops its natural resources. A video that opened his speech chronicled how the oil and gas industry has created new jobs in small communities around the country. After his address, Gerard told a news conference he was "encouraged" by the latest rumblings out of the White House on the much-watched Keystone XL oil pipeline, which must garner State Department approval. The pipeline would transport oil from Canada to the US Gulf of Mexico coast, but has been held up by opposition from environmental groups as well as from people whose property the pipeline would pass near. Gerard also characterized the recent problem with a break-away offshore drilling rig in Alaska as "transportation activity" and not related directly to oil production. Shell's Kulluk rig was unmoored for close to a week and swept onto a rocky coastline in high seas before being secured to safe harbor in Alaska. Environmental groups have said the incident was an example of why Shell should not be permitted to drill for oil in the Alaskan Arctic. Gerard said there is adequate oversight of Shell in Alaska. "Shell is being very closely watched," he said.