Democrats in the US Senate say they are seeking a major reversal of energy tax policies that would take billions of dollars in tax breaks and other benefits from the oil industry to underwrite renewable fuels.
The tax increases would reverse incentives passed as recently as three years ago to increase domestic exploration and production of oil and gas. The change reflects a shift from the Republican focus on expanding oil production to the Democratic concern about reducing climate change, reports the New York Times. Despite the talk however, the Democratic Senate has so far let an earlier House effort to end oil subsidies, HR6, languish.
On Tuesday, the Senate Finance Committee will take up a bill that would raise about $14 billion from oil companies over 10 years and would give about the same amount of money on new incentives for solar power, wind power, cellulosic ethanol and numerous other renewable energy sources. The bill is one of the main issues that the Democrats hope to clearly distinguish themselves from the Republicans.
But Senate Democrats are expected to go beyond the $14 billion in tax changes in the draft bill. Democratic officials said the committee is all but certain to adopt a proposal by Senator Jeff Bingaman of New Mexico that would raise $10 billion from companies that drill for oil and gas in federal waters but do not currently pay royalties to the government.
“We are cutting back subsidies for the oil and gas industry and using that money to finance the development of new and cleaner sources of energy,” said Mr. Bingaman, who plans to attach the entire tax package to the energy bill on the Senate floor next week.
Not surprising, the oil industry is not happy. “They talk about our companies as if they’re owned by space aliens,” said John Felmy, chief economist at the American Petroleum Institute, a trade association.
I wonder if he has looked in the mirror recently..