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As many of you are aware, President Obama’s 2010 budget targets independent oil and gas producers’ taxes. The budget request attacks virtually every tax provision that encourages investment in American oil and gas development. Specifically the Obama budget request would:

· Repeal the Percentage Depletion Allowance – established in 1926 and available only to small independent producers (less than 1,000 barrels per day);

· End expensing of Intangible Drilling and Development Costs - established in 1913, designed to attract capital to the high risk business of oil and gas exploration and production

· Terminate both Enhanced Oil Recovery and countercyclical Marginal Well tax credits;

· Repeal the passive loss exception for working interests in oil and gas properties;

Obviously, these changes would be devastating to the Illinois oil and gas industry and will only increase the United State’s reliance on foreign oil. The Obama Administration says it wants to improve America’s energy security and reduce foreign oil dependency. But targeting American energy producers with new taxes will clearly have the opposite effect.

IOGA is working closely with the Independent Petroleum Association of America on this issue. IOGA members are encouraged to visit www.ipaa.org to learn more about the devastating impacts of the proposals and what can be done to stop them.

There are over 4,200 people directly employed by the Illinois oil industry. The economic activity generated from our industry creates nearly 10,000 more Illinois jobs. More than 14,000 people owe their livelihood to the Illinois oil industry. Please do not assume that others will write letters and make phone calls on your behalf. It is imperative that your senators and representatives hear from you personally. Please ask your family, friends and business associates to also make their voices heard on this critical issue.

As a result of heightened security regular mail is not the best way to contact your legislators. Email, faxes and phone calls are the most effective method to make your voice heard.

President Obama released his FY 2010 Budget, entitled A New Era of Responsibility Renewing America’s Promise. The budget provides for a $30 plus billion_dollar tax increase on the nation’s oil and natural gas producers, designed to help pay for alternative energy projects.

In the proposed budget, President Obama strips from the oil and gas industry incentives that have been the “holy grail” of the industry for years, incentives that are critical in a high_risk investment industry.

Our nation’s oil and gas industry is made up of both major integrated oil companies and of several thousand independent oil and natural gas producers. Your plan will affect all American oil and gas companies that drill and produce oil and natural gas produced in the United States.

President Obama’s budget proposals will strip from the American independent oil and gas producer the economic incentives that provide the investment capital that is needed to explore and produce oil and gas for our country.

Without the economic investment incentives, exploration and production of oil and natural gas, as we know it, will drastically decline. Trillions of dollars will be lost, tens of thousands of jobs will be lost and our nation’s energy security will be severely threatened.

By signing this petition, you ask Congress to refuse to repeal the current incentives or to place new taxes and fees on the Oil and Gas Industry, as proposed by President Obama.

You want our Congress to know that passing the President’s proposed budget will increase the cost of energy for our country, cost America thousands of jobs and will threaten the security of the United States.