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Shell Says Eliminating Oil Tax Breaks Will Affect Supply, Prices

May 12, 2011 9:00 A.M. ET

By Tennille Tracy Of DOW JONES NEWSWIRES


WASHINGTON (Dow Jones)–As Democrats look to repeal tax breaks given to the oil and gas industry, Royal Dutch Shell PLC (RDSA, RDSA.LN, RDSB, RDSB.LN) President Marvin Odum said in congressional testimony Thursday that lawmakers may think “there is something to gain by taking more from a few,” but that they should consider the effects of higher taxes “on both supply and price” of oil.

Instead of eliminating the tax breaks, as House and Senate Democrats are proposing, Odum encourages lawmakers to expand domestic oil production to combat higher gasoline prices.

“While we can’t predict or control the price at the pump, we do know that we can increase the stability of our energy future through a combination of efficiency gains and increased supply,” Odum said in prepared remarks.

Odum is one of five top-level oil executives scheduled to make a rare appearance before Capitol Hill lawmakers Thursday. Among the other companies represented on a Senate hearing panel are Chevron Corp. (CVX)and Exxon Mobil Corp. (XOM).

The companies have become the target of legislation that eliminates billions of dollars of tax incentives given to the oil and gas industry. One such proposal, announced this week by Sen. Robert Menendez (D., N.J.) and other Democrats, repeals about $2 billion in annual incentives for the five largest companies and uses the revenue to pay down the U.S. deficit.

Thursday’s hearing is being held by the Senate Finance Committee. The head of that committee, Sen. Max Baucus (D., Mont.), is developing similar legislation that will use the revenue to promote clean energy.

The proposals have emerged as lawmakers on both sides of the aisle look to respond to high gasoline prices heading into an election year.

-By Tennille Tracy, Dow Jones Newswires; 202-862-6619; [email protected]


Associated Press

Oil-company executives, from left, Shell Oil President Marvin Odum; BP America Chairman H. Lamar McKay; and ConocoPhillips CEO James Mulva, testify before the Senate Finance Committee on Thursday.

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