Chesapeake Energy Corporation (CHK), Denbury Resources Inc. (DNR): Obama Sends the Taxman After the Energy Sector

I paid for what?
With all of this new spending, what exactly does the energy sector get out of it? If you are in fossil fuels, not much. There are some token moves that will help, such as implementing a faster, more efficient permitting process for oil and gas leasing. Also, a proposal to increase the contribution to the oil spill liability trust by $0.01 would help cover the costs for oil spill cleanup. This is an idea that has been kicked around since the Macondo spill back in 2010. With Exxon Mobil Corporation (NYSE:XOM)‘s recent spill in Arkansas in the news lately, it brings this proposal into the forefront.

Most of the benefits from these moves will go toward clean energy research and energy conservation initiatives. While many will deride the efforts as a way of using the oil and gas industry as an ATM, the case can be made that energy taxes have been used to develop the next energy source for well over a century.

What a Fool believes
According to a Harris Interactive poll, 74% of Americans believe that increased energy taxes is not the best solution. Many believe that higher taxes will eventually lead to higher energy costs for consumers. In reality, though, this is only a budget proposal, and it could be months before we see a final proposal.

As much as taxes may dominate the news cycles, very rarely should taxes sway your investment decisions. To paraphrase Warren Buffett, when someone pitches a sound investment idea to you, the first thought in your mind is never, “What will my tax rate be on the gain?” Rather, focus on solid companies that will perform no matter what business environment is out there.

The article Obama Sends the Taxman After the Energy Sector originally appeared on Fool.com is written by Tyler Crowe.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter, @TylerCroweFool. The Motley Fool owns shares of Denbury Resources and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy.

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