Reid Cites Tax Package Progress; CEOs Slam Energy Bills
The Senate's top tax writer has moved closer to forging an agreement on an energy bill tax package, according to Senate Majority Leader Harry Reid (D-Nev.).
With the chambers still trying to reconcile competing energy bills approved over the summer, Reid said he spoke this week with Finance Committee Chairman Max Baucus (D-Mont.) about an energy tax package that might find its way into a House-Senate conference report.
"He said that is pretty well worked out, the tax aspect of it," Reid told reporters yesterday, later adding he got the impression that Baucus feels "comfortable" that an agreement can be worked out.
An aide to Baucus declined to provide details but said talks are moving ahead. "Chairman Baucus is working with his colleagues in the House on a final energy tax package and making good progress," the aide said.
The Senate Finance Committee in June approved a $28 billion energy tax package that included new and expanded renewable energy incentives paid for with higher taxes on oil companies, but the provision was narrowly defeated on the Senate floor. The House energy bill approved in August contains a smaller, roughly $16 billion tax package that offsets expanded renewable energy and efficiency incentives by repealing oil industry tax breaks.
Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) said he was not certain what a tax agreement might entail.
"I have heard they are making progress," he added.
The larger Senate tax plan included credits for carbon capture and sequestration, as well as a new excise tax on offshore production aimed at oil companies holding flawed late 1990s leases, among other differences with the House measure (E&ENews PM, June 19).
Elsewhere, Reid said he is "very hopeful" the Senate plan to raise corporate average fuel economy standards will survive the negotiations. The Senate bill would raise standards for cars and light trucks to 35 miles per gallon by 2020.
But most automakers are pressing for a less aggressive plan offered by Reps. Baron Hill (D-Ind.) and Lee Terry (R-Neb.). Their plan would keep separate standards for cars and light trucks, while raising the overall mileage for the vehicle fleet sold in the United States to 32 to 35 mpg by 2022.
Their measure has around 170 sponsors in the House, and several senators led by the two Michigan Democrats are pressing for essentially the same plan.
Ford Motor Co. CEO Alan Mulally was in Washington this week meeting with lawmakers and other officials. "We are working with Congress and the administration to achieve fuel economy advancements that customers expect, balanced with what is economically and technologically feasible," he said in a prepared statement.
Rep. Ed Markey (D-Mass), a leading advocate for boosting CAFE to at least the Senate-backed level, has pointed to a Citigroup report on CAFE in arguing for such an increase (see related story).
Oil execs criticize energy plans
The congressional energy bills yesterday came under attack from top oil industry executives. High level officials from Marathon Oil Corp. and ConocoPhillips, among others, yesterday addressed a Washington conference hosted by the National Council on U.S.-Arab Relations.
Gary Heminger, executive vice president of Marathon, blasted efforts to roll back tax incentives, including the oil industry's eligibility for the section 199 deduction on income from domestically produced goods. He also criticized efforts in the House bill to limit domestic production incentives included in 2005 energy legislation.
"The uncertainty of the legislative landscape makes it difficult to assess political risk and the impact on potential investments," he said.
Heminger also attacked the "NOPEC" provision in the Senate energy plan that seeks to allow anti-trust actions against OPEC nations. NOPEC also easily passed the House as a stand-alone bill.
"Fingers are being pointed at the Arabian Gulf, and that is just wrong," Heminger said in a short interview. "They are outstanding suppliers, and they meet the needs of world demand today. If we want to draw a line to increase tensions [with] those suppliers, then we are going to have real problems."
The NOPEC language is among the provisions the White House has pledged to veto.
Sigmund Cornelius, a senior vice president at ConocoPhillips, also said the congressional energy plans are fatally flawed.
"We don't believe there are enough modifications that could be made ... that it would be a good bill at the end of the day," he said.
Environmentalists press for renewable power mandate
Elsewhere, environmentalists are trying to make the case for including a national renewable electric power mandate in a final House-Senate energy bill.
The House-passed bill would require utilities to provide 15 percent of their power from renewable sources by 2020, though roughly a fourth of the requirement can be met with energy efficiency measures. This effort stalled during the Senate debate and did not receive a vote.
The Union of Concerned Scientists is circulating an analysis claiming consumers would save between $13 billion and $18 billion on electricity and natural gas bills by 2020 if the renewables plan is adopted. The standard would also prevent greenhouse gas emissions of 126 million metric tons per year by 2020, the equivalent of taking about 21 million cars off the road, according to UCS.
Raising vehicle mileage standards and creating a national renewable electric power standard are top priorities for environmental groups.
Copyright 2007 E&E Daily. All Rights Reserved. Visit E&E Daily for a free trial.
Operates 12 Offshore Rigs
- ConocoPhillips Vows Financial Discipline As Aims To Boost Output (Nov 08)
- ConocoPhillips' Profit Beats Estimates, But Budget Cut 10% (Oct 26)
- Most US Gulf Oil Output Offline Ahead of Tropical Storm Nate (Oct 06)
Company: Marathon Oil Company more info
Operates 4 Offshore Rigs
- Harvey's Wake Tempers Bullish Outlook for US Oil Output Growth (Sep 01)
- RoyalGate to Drill New Well in Equatorial Guinea's Block Z (Sep 25)
- ShaMaran Subsidiary to Contest TAQA Default Notice (Sep 21)