Sen. Mary Landrieu (D-LA), a centrist and friend of oil and natural gas producers, has indicated that she is working with senators from other energy-producing states to map out a strategy to try to trim President Obama’s proposed $30 billion in tax hikes on producers when budget legislation comes to the Senate floor.

Landrieu “is having conversations with other oil and gas state senators to determine [the] course of action” to take, said the senator’s spokesman, Aaron Saunders. “She has no specific approach or legislative language at this point. In the coming weeks Sen. Landrieu will work with her Senate colleagues to discuss how best to address some of President Obama’s proposed changes to the oil and gas tax regime,” he said.

“I am particularly concerned about changes to the oil and gas tax regime. It was only eight months ago that oil reached $150 a barrel because our domestic supply was tight. Due to the economic crisis, the price of oil is temporarily low. In these tough times, we must make sure that we do not disadvantage our domestic industry,” Landrieu said.

Landrieu and other senators from oil- and gas-producing states are considering offering amendments to the budget legislation, Environment and Energy Daily reported last Wednesday. The Senate may take up budget legislation before the April recess.

The president’s budget blueprint, which was released in late February, proposes to repeal the expensing of drilling costs (costing producers $3.34 billion over 10 years); repeal percentage depletion for oil and gas ($8.25 billion); repeal the marginal well tax credit; repeal the enhanced oil recovery credit; increase geological and geophysical amortization costs for independent producers to seven years ($1.18 billion); levy an excise tax on Gulf of Mexico production ($5.28 billion); and repeal the manufacturing tax deduction ($13.29 billion) (see Daily GPI, Feb. 16).

The administration’s budget also proposes to charge producers user fees for processing oil and gas drilling permits on federal lands and increase the return from oil and gas production on federal lands by “reforming” royalties and adjusting rates.

The proposed tax hike on producers came only weeks after the Obama administration placed a hold on a Bush-era leasing plan that would open previously banned offshore areas, and overturned the results of an oil and gas lease auction in Utah that was held in the final days of the Bush administration (see Daily GPI, Feb. 11; Feb. 5).

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