Nick Snow
Washington Correspondent
WASHINGTON, DC, Jan. 19 -- US House members passed HR 6, which would repeal selected oil and gas federal tax incentives, pressure holders of deepwater leases issued without price thresholds to renegotiate, and redirect revenues to a new energy efficiency and alternatives research and development fund, on Jan. 18.
The measure, which passed 264-163, was the last of six bills designated for consideration by House Speaker Nancy Pelosi (D-Calif.) during the first 100 hr of business in 2007. Democrats called it an important initial step in reordering national energy priorities. Republican opponents said it would punish oil and gas producers and refiners with additional taxes and redirect revenues into a vaguely structured slush fund (OGJ Online, Jan. 15, 2007).
Opponents objected to the bill's coming to the floor under a closed rule, which prevented amendments. Chief Minority Leader John A. Boehner (R-Ohio) protested with a motion to adjourn, delaying proceedings for half an hour while a vote was taken and the motion was defeated. Minority Whip Roy Blunt (R-Mo.) said the bill does not seriously address US energy issues. Thirty-six Republicans voted for the measure.
Rep. James P. McGovern (D-Mass.) introduced the enabling resolution, saying oil companies received $7.3 billion in tax breaks in the 2005 Energy Policy Act. He called the breaks "kickbacks to corporations like Big Oil."
Rep. Devin Nunes (R-Calif.) countered, "[This bill] penalizes domestic producers and does nothing to foreign suppliers."
Rep. Judy Biggert (R-Ill.) said she would support HR 6 because she wanted to see more money spent on energy alternatives research, but she opposed the rule bringing it to the floor. "We should know where this money is going to go," she said.
Rep. Steve Pearce (R-NM) questioned the bill's provision that would pressure holders of federal deepwater leases issued in 1998-99 without price thresholds to renegotiate terms. He said the bill could undermine the integrity of government contracts.
Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.), who introduced HR 6 with Ways and Means Committee Chairman Charles B. Rangel (D-NY) on Jan. 12, said deepwater royalty relief was "a giveaway to oil companies to do something they would have done anyway." He said the new bill would not violate contract law because the original Deepwater Royalty Relief Act allows the government to impose additional conditions.
Resources Committee Chief Minority Member Don Young (R-Alas.) disagreed. "This bill is a taking, and it will go to court if it becomes law," he said, adding that he would have tried to amend it to tax imports instead.
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