Sometimes in life it's the quieter,less obvious things that are actually more impactful.Toward the end of last year there was a lot of activity in Congress that was potentially impactful to the oil and gas industry.Much of the news focused on the big pieces of legislation moving through Congress,such as the Bipartisan Infrastructure Bill that President Biden signed into law and the budget reconciliation package known as Build Back Better(BBB) bill that stalled in the Senate after Sen.Joe Manchin(D-WV) said he could not support it.The infrastructure bill directed a whole slew of government spending toward things such as the power grid,carbon capture and storage and electric vehicle recharging.BBB was originally going to remove several long-held tax deductions(percentage depletion allowance,deduction of geological and geophysical expenses,deduction of intangible drilling costs),but the version introduced in the House dropped those provisions.What it contained was a fee on methane emissions and an extension of the 45Q tax credit for carbon capture and storage.So with these warnings averted,what are the biggest threats out of Washington? The three biggest factors negatively impacting the oil and gas industry today are regulatory uncertainty,investment capital uncertainty and inflationary uncertainty.Government policy is impacting all three.
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