Blue Dog congressmen in US House urge moderate energy plan

The Blue Dog Coalition, 32 moderate-to-conservative House Democrats from mainly coastal and southern states, Tuesday proposed an energy policy plan it says will bridge the gap between ideological extremes. The plan proposes a series of tax incentives to increase fossil fuels production.


By the OGJ Online Staff

WASHINGTON, DC, July 10 -- The Blue Dog Coalition, 32 moderate-to-conservative House Democrats from mainly coastal and southern states, Tuesday proposed an energy policy plan that it says will bridge the gap between ideological extremes.

Rep. Max Sandlin (D-Tex.), cochairman of the group, said, "The Blue Dogs have adopted a comprehensive and balanced energy plan that increases energy supply and promotes greater energy efficiency as a road map to solving both short and long-term energy challenges."

The 20-page plan proposes a series of tax incentives designed to increase the production of fossil fuels and renewable energy.

The group is known for its fiscal conservatism and, consistent with its philosophy, the plan states that any tax cuts or spending increases must be subject to existing budget enforcement rules. In other words, revenue lost from any new tax incentives must be funded through an offset elsewhere in the federal budget.

Specific oil and gas tax incentives the group endorses include: countercyclical tax credits for marginal production; election to expense geological and geophysical expenditures and delay rental payments; 5-year net operating loss carryback for losses for independent oil and gas producers; temporary suspension of a limitation based on 65% of taxable income and extension of suspension of the net income limitation with respect to marginal production; and extension of the tax credit for the production of oil and gas from unconventional sources.

They also would offer a "plowback" incentive to encourage domestic energy investments: a 10% tax credit or a 50% deduction from gross income based on total drilling and development expenses. These would include all intangible drilling, geological and geophysical, and equipment costs.

The Bush administration's energy plan does not endorse any new tax incentives for oil and gas production because of revenue concerns. Pending congressional legislation includes some but not all of the tax credits the Blue Dogs advocate.

Additionally, the plan calls for expanding the use of renewable energy sources and encourages consumers and producers to invest in energy-efficient technologies and products.

The group urged the Organization of Petroleum Exporting Countries and other foreign oil suppliers to increase production at a time when the world spot price for crude "continues to hover over" $27/bbl.

The Blue Dogs also supported pending White House and Senate proposals to streamline environmental permitting and endorsed the expanded use of ethanol through a renewable fuels standard.

A Yellow Dog Democrat has been defined as a party loyalist who would vote for a yellow dog on the ballot as a Democrat. The Blue Dog coalition claims their views have been choked in Congress to the point that they have become blue dogs.

More in Production Operations