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Show Indexed tax credit for oil shale proposed By Helene C. Monberg, Washington correspondent Washington-Rep. James P. Johnson, R-Colo., expanded his $3 tax credit proposal before the House Ways and Means Committee on Tuesday afternoon. af-ternoon. He said it should be indexed for inflation. in-flation. He said the phase-out. now at $23 per barrel, should be raised to "between $25 and $30 per barrel," in mark-up in the Committee later. He said he favored extending the date when the credit would phase out to "perhaps 1990." All along the line of a bill by Rep. Ed Jenkins. D-Ga., Johnson said, Jenkins is one of the many House Members sponsoring a tax credit for syn-fuels. Johnson in February introduced his $3-tax-credit-for-oil-shale bill. "I am sure the Committee will consider these options. The point is this : the adoption of the tax credit NOW provides the necessary and IMMEDIATE IM-MEDIATE economic stability private industry says it needs. It will result in investment for construction activities now, and bring the shale oil facilities on line as soon as possible, consistent with the environmental and other federal, state and local government requirements which must and will be met." Johnson testified. He noted that this country spent $10 billion last year to import crude oil to meet nearly one-half of our domestic crude oil demand. "We simply must reduce our reliance on unreliable foreign sources of energy. "Shale oil production will assist in that goal. The $3 tax credit for shale oil production will help provide the proper atmosphere to bring about that necessary production," Johnson stated. A poll that Johnson sent out to industry last year to ask about "the single most productive type of incentive to stimulate the industry" resulted in unanimous industry response 'that a $3 a barrel income tax credit, adjusted for inflation' would be most helpful. Johnson testified. Note, he told the Committee, that the government would not have to forego any income at all through this method because industry would have to make the expenditure first before it could claim the tax credit. He said at least one energy company, Union Oil, with a project near Grand Valley, "has stated it will begin construction con-struction of a $100 million first module of 10,000 barrels-a-day on passage of the $3 oil shale tax credit," Johnson stated. Other advantages are that the tax credit is simple and immediate and can provide "at least a beginning point to provide an immediate economic stimulus" now until complemented by other incentive programs. "But other incentive programs should not be a substitute for the tax credit," Johnson stated. If the government had not withdrawn federal oil lands from leasing in 1930, "a commercial shale oil industry might have been allowed to develop and that development might have placed a price cap on foreign crude oil today, Johnson said. "Perhaps that is more conjecture than fact, but it is interesting to contemplate," con-template," he said. He presented a complete back-grounder to the Committee Com-mittee on the current status of oil shale, obviously a task which it had taken his staff and experts weeks to put together. |