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Both sides frustrated as Senate rejects Menendez oil tax bill

The US Senate procedurally rejected Robert Menendez’s (D-NJ) bill that would have ended several federal tax deductions for the five largest US oil companies and redirect the money to deficit reduction and alternative energy research and development subsidies.

Democrats who wanted to bring S. 2044 to a vote and Republicans who wanted to broaden the discussion appeared equally frustrated as 51 senators rejected a cloture motion, which would have ended debate with 60 affirmative votes.

“How seriously can we take debt reduction when people are unwilling to pluck the low-hanging fruit?” Claire McCaskill (D-Mo.) said following the Mar. 29 vote. “We’re borrowing money to prop up, to the tune of billions of dollars a year, corporations that don’t have to pay us [taxes] because they pay royalties to other countries. If I was reading this to my grandchildren, they’d call it fiction.”

“Is this really the best we can do?” Minority Leader Mitch McConnell (R-Ky.) asked shortly before the vote. “Is this the best we have to offer folks who are staring at $4/gal gasoline? In a process that has blocked other [proposals] from coming to the floor, no other idea has been allowed. Does anyone think the Senate has done its job on this issue?”

The vote came soon after US President Barack Obama urged the Senate to approve the bill. “With record profits and rising production, I’m not worried about the big oil companies,” he said in the White House Rose Garden on Mar. 29. “With high oil prices around the world, they’ve got more than enough incentive to produce even more oil. That’s why I think it’s time they got by without more help from taxpayers who are already having a tough enough time paying the bills and filling up their [gasoline] tank.”

Amendments blocked

Senate Republicans said in Mar. 28 floor statements that they were unhappy that the Democratic majority refused to allow votes on amendments to the oil tax bill. “This is the only energy bill that’s been up for debate on the Senate floor this Congress, and instead of having a real discussion about policy, Democrats are engaged in a political messaging exercise,” said Lisa Murkowski (Alas.), the Energy and Natural Resources Committee’s ranking minority member. “Republicans introduced 32 energy amendments, including one that enacted the president’s own executive order [to expedite federal permitting and review decisions on energy and natural resources projects], and not one was allowed to be considered or voted on.”

John Boozman (Ark.) said when his office informally polled his constituents last week, 79% said that soaring gasoline prices had changed their buying habits. “American families and business deserve a plan that will help bring prices down at the pump,” he continued. “The legislation before this chamber will increase taxes for producers, but not have any impact on prices. I believe our nation’s interests are better served with a clean measure that promotes developments of alternatives such as wind and solar while increasing access to our own fossil fuel resources.”

John C. Felmy, the American Petroleum Institute’s chief economist, said before the Mar. 29 Senate vote that S. 2044 essentially was a distraction. “Anybody who thinks raising oil company taxes will lower gasoline prices probably failed third grade arithmetic,” he said in a teleconference with reporters. “I would hope Congress moves beyond this rhetoric against the industry and puts its shoulder to the wheel. We must really look at what can be done to help consumers.”

Independent Petroleum Association of America Pres. Barry Russell, meanwhile, said following the vote: “Repealing the oil and gas industry’s provisions remains a centerpiece of the president’s energy agenda, as evidenced by his speech in the White House Rose Garden this morning. It is indeed understandable why nearly 70% of Americans, according to a new Reuters/Ipsos poll, disapprove of the president’s misguided approach to addressing gasoline prices.”

Contact Nick Snow at nicks@pennwell.com.


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