Legislation to extend renewable energy tax credits by imposing new taxes on the oil and gas industry should pass the US Senate and move quickly through the House, Senate Finance Committee Chairman Max Baucus (D-Mont.) predicted on Sept. 23.
"Today, we will win. We'll set America's energy future on a course we've all wanted for years," he said during a mid-day briefing with Sens. Jeff Bingaman (D-NM), Maria Cantwell (D-Wash.) and Ken Salazar (D-Colo.). The four lawmakers spoke hours before the full Senate was scheduled to vote on proposals which Baucus and Sen. Charles E. Grassley (R-Iowa), the Finance Committee's ranking minority member, jointly announced on Sept. 16.
The Senate approved the bill by 93 to 7 votes the afternoon of Sept. 23.
The proposals would raise part of $17 billion to help finance $42 billion in clean energy financial incentives by freezing the tax deduction for US oil and gas companies' domestic activities, tightening rules by which oil and gas companies pay taxes on income earned overseas, and freeing money from the general fund by increasing payments into the oil spill liability trust fund as new drilling is considered.
"Unfortunately, this legislation isn't going to do anything to increase oil and gas production," a spokeswoman for the American Petroleum Institute told OGJ Washington Pulse.
Baucus said that any changes by the House once it received a bill approved by the Senate would probably be minor. "We worked a long time with our committee counterparts and the leadership there, formally and informally. I believe that what we vote on today will, in the main, be adopted by the House," he said.
2008's major energy bill
Speaking to reporters earlier, Bingaman said that he thought the bill would be the major piece of energy legislation to come out of Congress in 2008. "I don't see how there's time to do anything else," he observed.
The legislation before the Senate contains changes in a provision modifying federal tax code Section 199 domestic manufacturing tax exemptions for the oil and gas industry, he said at the mid-day briefing. It would not deny the exemption but freeze it at 6%, and it would affect all oil and gas businesses and not just major oil companies, said Bingaman, who chairs the Energy and Natural Resources Committee.
"These incentives will play a critical role in promoting clean, renewable energy and energy efficiency, and in turn reduce our reliance on conventional fuels, promoting a more secure energy supply and combating global warming. Equally important, these tax credits will create high-paying jobs and reduce energy costs for all Americans," he said.
"This marks a game-changing point in our nation's history. Today, we will finally break the logjam on clean energy tax policy and begin accelerating America's desperately needed transition to a clean energy future," said Cantwell.
Provisions include more than $10,000 in renewable energy tax credits for consumers including, for the first time, $7,500 for plug-in hybrid electric motor vehicles, she noted. "The energy bill which passed Congress in 2005 gave two-thirds of its tax credits to fossil fuels and one-third to alternative and renewable energy technology. This bill reverses those shares," Cantwell said.
Baucus said that Minority Leader Mitch McConnell (R-Ky.), Minority Whip Jon Kyl (R-Ariz.) and other key Senate Republicans support the bill. "This has been a four-cornered negotiation. Everyone is on board," he said.
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