Texas Senator Blocks House-Senate Energy Conference

Sen. Kay Bailey Hutchison (R-Texas) yesterday took the credit for standing in the way of a formal House-Senate conference to reconcile competing energy bills.

In an interview with reporters, Hutchison said she opposes the repeal of billions of dollars in tax breaks for oil and gas companies and has blocked an effort to move to conference.

"I am very concerned about pieces of the legislation, and I am holding it up right now," Hutchison said in the Capitol late yesterday, citing "egregious" tax provisions in the House effort.

The House bill would repeal eligibility among oil producers and refiners for a tax deduction on income from domestic products, a provision that would raise an estimated $11.4 billion over 10 years.

"It is discrimination against one industry, and I also think it is coming at a time when we all know we need more refinery capacity," she said.

The Senate, when debating its version of the energy bill, rejected a tax package that would have repealed this deduction for major integrated oil and gas companies.

Hutchison added that she opposes other oil and gas tax provisions, as well. The House bill -- and the much larger Senate tax package that was not adopted -- would also raise several billion dollars more by changing tax treatment of foreign oil and gas extraction income.

Hutchison pointed generally to other problems with the legislation but did not provide details.

"I am not saying I will keep a hold on it forever, because I will listen to those who think it will be better to have input in the bill, but at this point, I don't see a clear advantage to going to conference with this kind of stacked deck," she said.

Oil and gas companies strongly oppose the House bill due to the tax provisions and other sections, claiming it would stymie domestic production. The House bill would scale back some provisions in 2005 energy legislation designed to expedite oil and gas drilling.

The industry's laundry list of objections to the bill includes House language on new environmental requirements and repeal of some royalty incentives. The Senate bill has drawn criticisms from refiners, who oppose the bill's major expansion of the national biofuels mandate and language on gasoline "price gouging."

Senate Majority Leader Harry Reid (D-Nev.) on Friday sought agreement to go to conference. Republicans objected but indicated a deal could come soon; a Senate GOP leadership aide said Friday that lawmakers hope to reach an agreement on launching a conference early this week.

It is not clear what other senators -- if any -- have placed holds on the bill. The House and Senate have already launched informal talks, but that process has drawn criticism from the GOP.

"The concern is, of course, if we don't go to conference it will be ping-ponged back and forth across the rotunda, and we won't have any inputs on it," said Sen. John Cornyn (R-Texas), referring to plans to reach a House-Senate agreement without a formal conference committee.

"The fact of the matter is if it contains the tax provisions and perhaps other provisions the president is going to veto it anyway," he added.

A top White House official recently singled out several provisions that could prompt a presidential veto (E&E Daily, Oct. 16).

Cornyn said he had a prior hold on the measure but has released it.

Last week, a bipartisan group of lawmakers that oppose Senate language on auto mileage standards agreed to drop their objections to allowing a conference, but they are still pushing to soften the corporate average fuel economy language. House and Senate Democratic leaders say they plan to complete an energy package this year with or without going to conference.

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