The Energy Bill is Back in Full FormDecember 5, 2007 - by Donny Shaw
The text of the comprehensive energy bill that the House will be voting on this week has not been made public yet, but the latest reports indicate that the once-imperiled bill is suddenly back up to full strength, combining the strongest provisions of the both the original House and Senate versions. Last week it was announced that a compromise had been reached among Democratic leaders to allow the Senate’s fuel efficiency increase requirement to come to a vote. Now it appears that House Speaker Nancy Pelosi (D-CA) is planing on reattaching the House’s recision of $14 billion in tax breaks and subsidies for oil companies and the mandate for utilities to produce 15 percent of their energy through renewable fuels.
>House and Senate Democrats on Wednesday unveiled a $ 21 billion energy tax package that in large part repeals tax breaks for the biggest oil and gas companies to fund long-term extension of renewable-energy tax credits and encourages biofuels and energy efficiency.
> The tax provision would repeal the domestic manufacturing credit for the top five oil companies while freezing the deduction at 6% for all others in the sector, and would tighten rules governing the payment of taxes by oil and gas producers on foreign-earned income. The big-five companies are ExxonMobil (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Royal Dutch Shell (RDSA), and BP Plc (BP). All told, the oil-industry items would raise an estimated $13.5 billion over 10 years.
>The legislation includes long-term extensions of tax credits for renewable electricity, tax credits for carbon capture and sequestration projects, biofuels production and tax credit bonds for renewable energy and conservation. It would also extend energy-efficiency tax incentives.
After passing both the House and the Senate earlier this year, the energy bill was blocked from going to a conference committee by Senate Republicans who opposed the House’s oil tax provision. In October, Democratic leaders decided to by the Republicans’ objections and move the bill to an informal negotiation process. And as lobbyists predicted at the time, the informal talks made it easier for Democrats to work through their differences and come up with an ideal compromise.
The newly-revamped bill is expected to pass the House easily, but its future in the Senate, where Democrats hold only the slimmest majority, is uncertain. Without doubt Senate Republicans will filibuster the bill, forcing Democrats to find 9 Republicans to break ranks and vote for the bill if they are to surpass the 60-vote barrier a filibuster would create. And even if Democrats are able to get the bill through the Senate, President Bush has threatened to veto it over the oil tax provisions, which would require a nearly-impossible 67 votes to override.
For more background on the oil subsidies issue, see this New York Times article from last year: Incentives on Oil Barely Help U.S., Study Suggests.