Squamish, BC ( pressoclock ) June 20, 2011 - No one questions the facts. Demand for oil and gas will continue to increase. Prices for oil and gas will continue to increase. Alternative energy sources will not be able to completely replace oil and gas for meeting this increasing demand.

What is in question is how to move away from being so reliant on foreign supplies of oil and gas, and one of the most crucial ways in which that process can begin is through oil and gas partnerships. To reduce the country's reliance on foreign oil production and the volatile prices that accompany it, the IRS has created a number of tax incentives to encourage well informed, highly qualified investors to invest in oil and gas and assist in reducing reliance on foreign production while by increasing domestic production. According to Phil Gramm, domestic production is a necessity: “Quite frankly, I think nothing could do more to immediately bolster national security then enabling us to produce more oil and gas here at home at a price consumers could afford. “

Direct Participation Programs (DPPs) are Oil and Gas Partnerships designed to allow the investor to directly participate in the ownership of the well. By being a part-owner in the well, the investor reaps the benefits of ownership. These benefits include tax deductions for the costs associated with developing and drilling the well, the equipment needed to drill the well and produce the oil, and the lease costs associated with the land. In addition, Direct Participation Programs benefit from other tax incentives that allow for 15 - 25 per cent of the income generated from the well to be earned tax-free.

The incentives offered by the IRS to encourage Oil and Gas Partnerships help off-set the risk the investor takes in making oil and gas investments, which are considered high risk (that is why they are only available to certain highly qualified investors). However, the true benefit is to everyone in the country who will benefit from the increased domestic production that reduces the country's overall reliance on foreign oil and gas.

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