One of the major problems that Americans face these days would have to be the price of gasoline and its effect on our economy as a whole.
Oil is a non-renewable, consumable product. In recent years, oil companies have come under fire for lack of good safety practices and for creating environmental problems. Yet most of us own and operate automobiles. We use electricity that may be produced in a plant that is fueled by petroleum products. We use plastics and other products that have a petroleum base. Oil and natural gas exploration can help create job opportunities in the U.S. Oil and gas industry have created their own set of problems. With all of this in mind, the United States government created tax breaks for investors who are willing to invest in exploration for oil and development of new methods of extracting oil supplies. It takes a stout heart and a fearless investor to back oil exploration and development, explains Brian Alfaro, President of Alfaro Oil and Gas. Yet, the rewards are there such as bringing hope back to our economy. First, of all there is the thrill of being part of new development. Second, there are the very substantial tax breaks. There are a lot of related costs that are incurred the first year of drilling and operating an oil well. Those costs usually amount to 85% of the total costs of setting up an oil well. All of those costs are deductible from the investor’s general income – not just the profit from the well. An oil investor can select the type of company in which to invest. For example: historically, small companies that drill in shallow water tend to have a better safety record that the big companies that drill farther out in the ocean. An oil investor could choose to back a company that has a good safety record and a good environmental record, while still taking advantage of the substantial tax advantages.
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