Fight Over Oil Tax Threatens Energy Bill
By Associated Press (Associated Press) - August 3, 2007
House leaders pressed Democrats from oil states Friday to support $16 billion in oil industry taxes and sought a compromise over use of renewable fuels by electric utilities, hoping to clear the way for approval of energy legislation.
But a vote, planned for Friday, was postponed after the House became bogged down over problems with a computerized voting system, compounded by Republican anger over a disputed vote Thursday night on an agriculture bill.
House Speaker Nancy Pelosi, who has vowed to get energy legislation through before lawmakers leave for their summer recess at the end of the week, said it would be taken up on Saturday.
The White House, meanwhile, expressed broad opposition to the two Democratic energy bills, saying they make ”no serious attempts to increase our energy security or address high energy costs” and would harm domestic oil and gas production.
The administration’s statement said senior advisers would recommend the president veto the bills, should they reach his desk. House Republican leaders on Thursday sent President Bush a letter also urging a veto.
The legislation would roll back nearly $16 billion in tax breaks for oil companies and provide a broad array of tax incentives and other measures to spur development of renewable energy sources and energy efficiency programs. It would establish new efficiency standards for appliances and other equipment and government support for research into alternative energy such as batteries for plug-in hybrid-electric cars.
Republicans complained the bill does nothing to increase domestic oil and gas production and rolls back some of the measures passed by Congress two years ago that made it easier to gain access to natural gas on federal land.
The oil industry taxes and a requirement for electric utilities nationwide to produce at least 15 percent of their electricity from renewable energy sources has attracted the most intense lobbying in recent days.
Hoping to sway some reluctant Democrats, Reps. Tom Udall, D-N.M., and Todd Platts, R-Pa., softened their renewable fuels proposal so that 4 percent of the requirement could be met through energy efficiency and conservation incentives.
But that has not mollified the electric utility industry and business groups who contend the federal mandate would lead to higher electricity costs in areas where renewable energy sources such as wind power are unavailable. They argue that 24 states already have requirements to use renewable fuels, many of them more stringent what is being proposed in the amendment Udall and Platts want to get into the bill.
”We have been down in the trenches fighting (this) proposal tooth and nail,” said Tom Kuhn, president of the Edison Electric Institute, the trade association for the investor-owned utility companies. Lobbying powerhouses such as the U.S. Chamber of Commerce and National Association of Manufactures also have fought the proposal.
Environmentalists have been equally aggressive in pushing for the renewable fuels requirement, viewing it as a global warming issue. By getting utilities to use less coal, a major source of carbon dioxide emissions, and spurring development of wind, solar and biomass technologies, fewer greenhouse gases will reach the atmosphere, they argue.
”This is the top priority for the environmental community,” said Anna Aurilio of U.S. PIRG, an environmental advocacy group. ”It would be a real clean energy breakthrough.”
Meanwhile, Pelosi was trying to solidify Democratic support around the $16 billion tax package, which would close several tax loopholes for the oil companies and use the money to give tax breaks for energy efficiency programs and development of renewable energy industries.
”I know they’re looking for votes,” said Rep. Gene Green, D-Texas, one of the Democrats who has balked over the oil industry tax increases.
Green said some of the ”Blue Dog” Democrats — moderate to conservatives, including lawmakers from oil-producing states — were threatening to withhold their support.
”I think it’s too much to hit one industry with,” Green said in an interview.
Supporters of the tax provisions say they take away loopholes the oil companies have been taking advantage of, including a tax break given in 2004 to promote U.S. manufacturing and another involving income from foreign oil production.
The White House said it opposed the tax measures because they will put U.S. oil companies ”at a disadvantage to their foreign competitors” and reduce their ability to invest in foreign energy projects.