Nick Snow
Washington Correspondent
WASHINGTON, DC, Apr. 3 -- US Sen. Kay Bailey Hutchinson (R-Tex.) urged US Sec. of the Treasury Henry M. Paulson to promptly implement a provision of the 2005 Energy Policy Act (EPACT) allowing refiners to deduct 50% of plant expansion costs if such an expansion increases capacity by at least 5%.
Noting that US President George W. Bush signed EPACT into law on Aug. 8, 2005, Hutchinson said some companies have not yet received regulations from the Internal Revenue Service to implement the decision some 20 months later.
"Companies are prepared to invest billions in projects that take years to plan, engineer, and design, but without this guidance, refineries are unable to determine future investments in additional capacity. The lack of a final regulation for this provision is hampering company decisions to proceed in expanding capacity to provide needed products to our US market," she wrote Paulson in an Apr. 2 letter.
The National Petrochemical & Refiners Association praised Hutchinson's effort. "Refiners need these decisions in place to be able to make important investment decisions that will increase gasoline supply, provide additional energy security, and reduce potential stress for consumers in the future," NPRA Executive Vice-Pres. Charles T. Drevna said.
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