“Thank you, Mr. Chairman. Some may be surprised by how much the the U.S. government spends on energy policy through our Tax Code. According to the Energy Information Administration, for 2010, the value of direct federal financial interventions and subsidies in energy markets was estimated at about $37 billion. Of this total, about $16 billion - or approximately 44 percent - can be attributed to tax incentives. In calling this hearing today, the Chairman is raising an important point that warrants consideration - should we be pursuing energy policy through the Tax Code and if so, how do we do so in the most effective manner.
“Over the years, Congress has enacted a number of energy tax incentives that have been quite successful. For example, the Recovery Act included the 48C clean energy manufacturing tax credit, providing a 30 percent credit for investments in facilities that manufacture clean energy products. According to the Department of Energy, the $2.3 billion allocation of tax credits will result in more than 17,000 jobs. This investment will be matched by as much as $5.4 billion in private sector funding likely supporting up to 41,000 additional jobs.
“On the other hand, when I read in late July that the largest oil companies reported another quarter of profitability, with one company reporting a 97 percent increase in profits, I had to once again question whether these profitable companies really need taxpayer subsidies. We spend about $2 billion each year on subsidies for the largest oil and gas companies. In this time of record deficits, is this really smart investment by our government?
“In focusing on oil production today, an interesting point to note is the emerging oil boom right here in the Americas. From Brazil to Argentina to Canada - even North Dakota - the Western hemisphere is seeing an increase in oil discovery and production. This a significant development that may ease our country's dependence on Middle Eastern oil.
“So I'm glad we're having this conversation today and examining our energy tax provisions. I look forward to the testimony of all of our witnesses today. But I'm particularly pleased that we'll be joined by one of my constituents, Hank Ziomek, who is the Director of Sales at Titeflex in Springfield. Hank will be discussing how the growth of Titeflex is dependent on the growth of the natural gas vehicle market.
“Thank you, Mr. Chairman."
