WATCHING WASHINGTON BTU TAX BATTLE HITS CAPITOL HILL

May 10, 1993
With Patrick Crow The battle over President Clinton's proposed BTU tax officially unfolded on Capitol Hill last week. As the House ways and means committee began work on the administration's plan to tax the energy content of fuels, including a double tax on petroleum, industry launched an intense campaign to kill it. The administration made no major changes in the legislative language for the tax plan it sent to Congress. Ways and means began with a detailed explanation of the tax bill,

The battle over President Clinton's proposed BTU tax officially unfolded on Capitol Hill last week.

As the House ways and means committee began work on the administration's plan to tax the energy content of fuels, including a double tax on petroleum, industry launched an intense campaign to kill it.

The administration made no major changes in the legislative language for the tax plan it sent to Congress.

Ways and means began with a detailed explanation of the tax bill, accompanied by many behind-the-curtains negotiations by congressmen and lobbyists seeking changes.

Some oil state Democrats on the committee, like Rep. Mike Andrews (D-Tex.), were seeking big changes in the tay such as the point where it is collected.

The panel may begin marking up the legislation next week.

INDUSTRIAL OPPOSITION

Meanwhile, the National Association of Manufacturers said 906 organizations and companies have joined the Affordable Energy Alliance, a group with the simple goal of killing the BTU tax.

Jerry Jasinowski, National Association of Manufacturers president, expects as many as 1,300 members in the group, making it the largest ever.

He said, "I sense a groundswell of opposition to the BTU tax and I think it will be a close call in the ways and means committee."

If the BTU tax survives the House of Representatives, the group hopes to kill it in the Senate finance committee, where Democrats have only a slim majority.

NAM plans to lobby congressmen from states the tax will hurt most: Louisiana, Wyoming, North Dakota, Texas, West Virginia, Alaska, Montana, Mississippi, Oklahoma, Alabama, Indiana, Idaho, New Mexico, Arkansas, and Kentucky.

Jasinowski said, "This is a remarkably broad coalition representing nearly every sector of the economy, industry, trade groups, and state business associations from all across the U.S.

"Transportation, agriculture, construction, utility companies, chemicals, papers, and energy are just some of the areas where employees, employers, and customers would experience the especially severe effects of this tay which is so heavily centered on industrial production.

"Everyone loses under this proposed BTU tax because it condemns many of our exporting companies to second rate competitive status in the world. It is a job killer, and it will hit the South and West especially hard."

NATIONAL SECURITY

John Lichtblau of the Petroleum Industry Research Foundation, New York, attacked the administration's argument that the BTU tax would help national security.

He pointed out that the U.S. is part of a world petroleum market. So a BTU tax would not protect the nation against higher prices in times of shortage.

He said the argument that foreign suppliers would withhold oil supplies for political reasons is a red herring.

Lichtblau said since the mid-1980s there has been a global buyers' market and all actions to use oil exports as a political instrument were taken by buyers, mainly the U.S. and other members of the United Nations.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.