I have received permission to share a memo from my CEO, Charlie Smith, to the employees of my company. I think the message is relevant not only to employees but the general public. We do have a link on our website to send messages to your Representatives and Senators. I think it is important to do so.

We are writing to you to express our deepest concern regarding the future of our local petroleum industry. President Obama’s Administration has proposed sweeping changes to the tax burden on the oil and gas industry that if enacted will significantly harm our area’s oil and gas production industry, and the jobs and economic benefits that it brings to our local economies of southern Illinois, southwestern Indiana, and western Kentucky.

Taxes aimed at the local oil and gas production industry are the repeal of the percentage depletion allowance, elimination of expensing of intangible drilling costs, elimination of the passive loss exception, and a change to the amortization schedule for geological and geophysical costs.  There are others too numerous to mention.

The rest of the memo below the fold:

Repeal of the Percentage Depletion Allowance alone will devastate the American oil and gas industry.  If enacted, this proposal will not only result in an immediate and huge increase to the tax burden of oil interest owners, but it will jeopardize the continued existence of economically marginal stripper wells that account for nearly all the production in the Illinois Basin.  Percentage Depletion Allowance was established in 1926 and is available to companies that produce less than 1,000 barrels of oil per day.  The proposed repeal of this provision is an attack on small independent producers and interest owners

The Administration has also proposed significantly raising taxes on America’s oil refining companies. While the details are not yet finalized, the Administration has promised to pursue in Congress either a “Carbon” tax on gasoline and diesel fuel or a complex system of “Cap and Trade” – whereby producers of fossil fuel energy will be required to buy credits before they can sell their energy. In either case, the cost of energy will increase significantly, by some estimates as much as $3,000 per-year, per-person.

These higher energy taxes would also significantly increase the cost of operating our local, farmer-owned CountryMark refinery. This refinery buys most of the oil produced in our area. As one of the nation’s smallest refineries, the CountryMark refinery is much more vulnerable to higher taxes than those owned by the large oil companies. The proposed higher tax structure threatens the 350 jobs at CountryMark, as well as CountryMark member cooperatives that deliver CountryMark branded fuels.

We encourage you to contact your legislators and let them know how strongly you oppose the Obama Administration’s attack on the American oil and gas industry.  Tell your legislators that eliminating the longstanding tax code provisions that encourage the responsible development of American energy will only increase our nation’s reliance on foreign oil while destroying thousands of American jobs.  In the Illinois Basin alone, it is estimated that more than 20,000 jobs are at stake and none of them work for “big oil”.

We urge you to contact your legislators and let them know that this attack on the American oil and gas production and refining industry is unacceptable. Please make your voice heard by visiting the CountryMark website at http://www.countrymark.com and click on legislative affairs. The process is simple and quick. You just type in your name and address and the website will determine your legislators. A letter has been written that you can edit to suit your needs. Click “submit” and the letter will be sent electronically to each of your legislators. Regular mail is not the best option due to Capitol Hill security restrictions that will significantly delay its delivery.