Rep. Katie Porter is in no mood for nonsense from anyone, much less a Big Oil executive who wants to whine about not getting the tax breaks he thinks he deserves. And Mark Murphy, President of Strata Production Company, learned that lesson the hard way.
During questioning about the tax breaks given to oil companies, Porter lobbed a question to him that he should have known better than to equivocate on: How much of the intangible drilling costs are deductible on oil companies' taxes?
Intangible drilling costs are considered an "above-the-line" item, meaning that whatever oil companies deduct reduces their taxable income right off the top. It is a significant tax advantage.
Mr. Murphy made the mistake of telling Rep. Porter he deducted them just like everyone else did, as an ordinary deduction. When are these people going to get a clue about Katie Porter and how she operates? Of course she knew the answer to the question and she knew he was BSing her, too. Worse yet, he patronized her by telling her she had a "misconception" about the idea that the "oil and gas industry had some kind of special tax structure."
"You do benefit from special rules," Porter corrected. "There's a special tax rule for intangible drilling costs that does not apply to other kinds of expenses that businesses have."
"You get to deduct 70 percent of your costs immediately and other businesses have to amortize their expenses over their entire profit stream," she said.
Taking one final whack at him, Porter warned: "So please don't patronize me by telling me the oil & gas industry doesn't have any special tax provisions. Because if you would like that to be the rule, I would be happy to have Congress deliver."
OUCH. She scorched his butt there and it was so very good. Also, it's just the beginning. Reuters reports that Porter is very much looking forward to being the chair of the House Natural Resources Oversight Committee, where she is working to increase royalty rates and hold arrogant oil executives' feet to the fire.
“How can things not have gone up as I see the cost of my everyday expenses -- healthcare, childcare, college, housing -- all go up?” Porter wondered, when considering royalty rates. “This is not a coincidence. This takes intense lobbying work by the fossil fuel industry to prevent these changes.”
Those lobbyists have met their match.
Oh my lord, Katie Porter.
"Please don't patronize me by telling me the oil & gas industry doesn't have any special tax provisions."
— Public Citizen (@Public_Citizen) March 9, 2021