With the economy in a recovering state, now is not the time to add undue burdens to the american workers in the form of higher gas prices, nor is it the time to discourage growth in any particular sector, especially the oil and gas industry. President Barack Obama has had a target on the oil industry for quite some time and it doesn’t seem like he is letting this one go.

Again last week, the president was “calling on the GOP to help end oil tax breaks”, although the Republicans on Capital Hill have been consistent with wanting to keep current tax breaks in place.

The proposed changes include eight oil and gas tax provisions where the primary issue in question revolves around a domestic manufacturing deduction which is also available to other industries as a deduction in addition to oil and gas specific intangible drilling costs. These intangible drilling costs include the cost of repairs, labor and a host of drilling related expenditures.

Due to the enormous costs involved in drilling and producing oil in the U.S. these special deductions are put in place to advert the risk associated with drilling operations. For example: in the event of a dry hole, these tax deductions, allow for a significant portion of the intangible drilling costs to be written off. Essentially, an investor is not taxed on a portion of the money lost for this particular drilling operation. It is important to keep in mind though, these intangible drilling costs are most often associated with direct job creation and labor expenditures.

To eliminate these tax deductions will indirectly result in hundreds of thousands, if not millions of lost jobs over the next 10 years. This is not conducive to a healthy economic recovery. Additionally, the administration has targeted royalty owners and their ability to deduct a percentage of the oil and gas revenue for what is known as a percentage depletion deduction. By allowing this percentage depletion deduction, royalty owners are encouraged to allow drilling and offered an incentive for putting oil into the marketplace. Without this deduction, royalty owners may withhold from allowing drilling into their oil reserves in hopes for a higher oil price in the future. This effect alone could negatively disrupt supplies causing even higher oil prices.

With the Obama administration plan, not only is the President looking to cut tax breaks for the major oil companies, but he is also targeting smaller independent oil and gas companies as well. According to the Texas Alliance of Energy Producers, “Independents have drilled 96% of wells in Texas, and produced 88% of the oil & gas in Texas.”

A recent study by the Texas Alliance of Energy Producers has estimated that approximately 71,000 Texans will directly lose their oil & gas jobs if the repeal of tax provisions becomes law. The study also indicates that over the next 10 years, the negative impact to the State of Texas alone would be about $50 billion.

While this is not just a case of the president against the big oil and gas producers, but rather the president against a state which has fared rather well in comparison during these economic hardships. While the oil and gas industry is a contributing factor to the fact that Texas has continued to prosper while other states have been falling behind, the answer is not to put more people out of work, but rather to learn from what is working and incorporate these lessons into the greater picture of the economy.

With the economy in a recovering state, we trust the Republicans in Washington to recognize the negative impact associated with these anticipated regulations. We hope that the lawmakers don’t offer the oil industry over now as a compromise, especially one which affects the backbone of Texas. In reality, removing these tax breaks would benefit no one and would negatively affect the nation as a whole, not just Texans.