Senate Committee: Big Oil Needs To Ante Up genre: Econ-Recon & Polispeak

Big Oil

Could Washington actually be serious about reducing our dependence on foreign oil? In a move that seems to signal as much, the Senate Finance Committee moved forward with a bill that would impose 29 billion dollars in new taxes on the U.S. oil industry. The bill is designed to funnel money into alternative energy exploration programs.

WASHINGTON - A proposal to hit oil companies with $29 billion in new taxes advanced in the Senate on Tuesday, targeting the money to energy conservation, wind turbines, electric hybrid cars and clean coal technology.

But Sen. Chuck Grassley, R-Iowa, said, "We have entered a new era in energy markets ...(that) requires a dramatic shift away from tax incentives for oil and gas production" and toward support for other energy sources and efficiency.

The tax package that emerged from the Finance Committee reflected the dramatic tilt of congressional sentiment toward renewable fuels — and away from support of oil companies — since Democrats took over control of Congress. In part, the shift stems from growing concerns about the impact of fossil fuels on global warming and motorists' anger over soaring gasoline prices.

The measure would extend and increase taxes paid under an oil spill liability law and eliminate existing tax credits involving foreign oil production. In all, the tax changes were expected to cost the industry more than $15 billion over a decade.

Another measure, pushed by Sen. Jeff Bingaman (news, bio, voting record), D-N.M., was aimed at collected $10.7 billion in royalties the government has been unable to collect because of flawed oil leasing contracts issued by the Interior Department in 1998-99. The government would collect an excise tax on any oil taken from the Gulf of Mexico, subject to royalties not being paid.

The bill has a long way to go to become law but lawmakers are likely concerned that high gas prices may play a role in the 2008 election cycle. Given voter frustration with energy costs, record oil industry profits, and the impression that our ongoing efforts in Iraq may be partially attributed to our need for oil, politicians may be ready to abandon their long love affair with big oil and their huge lobbying apparatus. I would suggest that the shift is long overdue.

Daniel DiRito | June 19, 2007 | 2:18 PM
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Comments

1 On June 20, 2007 at 12:30 PM, Tom Gray wrote —

The U.S. Senate is likely to vote later today on the Bingaman Renewable Electricity Standard (RES) amendment, which would require electric utilities to obtain 15% of their electricity from renewable energy sources such as wind, solar, biomass and geothermal by 2020. More info here.

The inside word on the Bingaman amendment is that the vote will be very tight. If you support this first meaningful step to fight global warming, the time to weigh in is right now. You can reach any Senator's office through the Capitol switchboard at 202-224-3121 or at powerofwind.com.

Regards,
Thomas O. Gray
American Wind Energy Association
www.awea.org
risingwind.blogspot.com

Thought Theater at Blogged

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