API co-hosted a blogger conference call with ExxonMobil yesterday to discuss the company's first quarter earnings and energy tax policies. Ken Cohen, ExxonMobil's vice president of public and government affairs, and Jaime Spellings, ExxonMobil's general tax counsel, broke down the company's profits and spoke to misperceptions about the current tax code.

"If we go back and look at the period 2005 to 2010 and look at the United States, our income before taxes was 67 billion (dollars)," Mr. Cohen explained. "And our income taxes for that same period - that includes federal and state income taxes - were $22 billion, for an effective tax rate of over 32 percent."

To provide further insight, Mr. Spellings detailed aspects of the tax code that affect the oil and natural gas industry, including the manufacturing deduction from Section 199, intangible drilling and development costs and percentage depletion.

"If you look at the structure of 199, it has a general provision that applies to all manufacturing, including farming, mining, fishing, video game development, Hollywood movie production," Mr. Spellings explained. "There is a provision much later in the details of Section 199 that - for oil and gas only - it actually reduces the value of the manufacturing deduction by a third. So if everyone else gets a 9-percent manufacturing deduction, we get a 6-percent manufacturing deduction," he continued.

John Felmy, API's chief economist, and Stephen Comstock, API's tax policy manager, also were on hand to answer bloggers' questions. In particular, Mr. Felmy spoke to the benefits of increasing domestic oil and gas production.

"The more we invest here, the more we produce, the more we have improved energy security," Mr. Felmy said. "And, really importantly, it reduces the trade deficit. And for every reduction in the trade deficit...that's dollars that aren't flowing abroad and can be spent here," he maintained.

The bloggers on the call included:

• The Bear, The Absurd Report
• Ben Domenech, The New Ledger
• Bob McCarty, Bob McCarty Writes
• Bruce McQuain, Questions and Observations
• Byron King, Agora Financial
• Carter Wood, Shopfloor
• Jazz Shaw, Hot Air
• Jim Hoeft, Bearing Drift
• Joy McCann, Little Miss Attila
• Lee Doren, Competitive Enterprise Institute
• Lew Waters, Right in a Left World
• Mark Perry, Carpe Diem
• Meghan Gordon, Platts: The Barrel
• Merv Benson, Prairie Pundit
• Pejman Yousefzadeh, The New Ledger
• Steve Kijak, Rightside VA

For more information about oil and natural gas industry earnings or energy tax policies, I encourage you to listen to the audio recording of the call using the player and follow along with the full transcript below.