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Show hues! excess profit or face 00 i nil would rather see American dollars going to Americans looking for oil than to Arab oil sheiks who are rapidly gaining a stranglehold on our lives and economy." Referring to the nation's "sorry experience with natural gas controls,'" Garn said "controls always produce pro-duce shortages and high prices. The free market place is the best vehicle for allocation of resources. The principal reason for our energy problems today is government interference in the marketplace, and the sooner the government gets out, the sooner we'll find a solution.'- Oil companies should reinvest re-invest "excess profits" in the development of new U.S. energy supplies or be required to pay a 90 percent per-cent tax, U.S. Senator Jake Garn (R-Utah) said Wednesday Wednes-day in announcing support for new legislation. "I stand behind President Carter's decision to decontrol decon-trol the price of domestically domesti-cally produced oil by 1981 because it is the first step our dependence on foreign sources," Utah's senior senator said. "Decontrol Owill provide necessary economic eco-nomic incentives to induce greater domestic exploration explor-ation and development and ultimately, more abundant supplies and lower prices," he said. He stated, however, that decontrolling oil prices would not have the desired effect if oil companies use their additional profits to purchase hotels or invest in other non energy related ventures. Americans are willing to grit their teeth and pay more for gasoline and other oil products," he said, "if it could mean an improved national energy picture." "The oil companies have a definite responsibility to utilize excess profits for suitable projects," he said. As an incentive, he said he will co-sponsor the "Excess "Ex-cess Petroleum Profits Tax of 1979," which has been introduced by Senator James McClure (R -Idaho). This legislation would levy a 90 percent tax on petroleum industry income exceeding the average rate of return for all industries -unless IT for all industries - unless it is reinvested in energy production. In addition to oil exploration, explor-ation, Garn said the energy production tax exemption would apply to new energy sources, including oil shale, tar sands, coal liquefication, coal gasification, geothermal, geo-thermal, solar, hydrogen and others. "Utah is rich in all of these resources, and I am hopeful that the proposed pro-posed legislation will act as a carrot to speed up development develop-ment and production." Garn said that the tax inducement is a much better approach than President Carter's proposed 50 percent per-cent windfall tax, in which all the revenues would go to the government. 'I would much rather encourage en-courage the oil companies to plow their profits back into exploration than to have the government administering the funds," he said. "The new Department of Energy is a perfect example of the waste and inefficiency which occur when the government gets directly involved in energy matters. The DOE spends billions of dollars more than all of the oil com -panies combined profits without adding anything to our domestic production.'' "Oil companies certainly don't have a spotless record, but they know a lot more about energy development than does the government." Garn said no one knows how much additional oil will be found under total decontrol, decon-trol, with estimates ranging between 500,000 and2. 5 million mil-lion barrels a day. "But I |
