Posted on 12/27/2006 1:46:17 PM PST by Graybeard58
WASHINGTON — House Democrats in the first weeks of the new Congress plan to establish a dedicated fund to promote renewable energy and conservation, using money from oil companies.
That's only one legislative hit the oil industry is expected to take next year as a Congress run by Democrats is likely to show little sympathy to the cash-rich, high-profile business.
Whether the issue is rolling back tax breaks — some approved by Congress only 18 months ago — pushing for more use of ethanol and other biofuels instead of gasoline, or investigations into shortfalls in royalty payments to the government, oil industry lobbyists will spend most of their time playing defense.
Details of a renewable fuels fund have yet to be worked out. Nonetheless, it's one of the initiatives the House will take up during its first 100 hours in session in January, according to aides to Speaker-elect Nancy Pelosi. At least some of the money — revenue gained by rolling back some tax breaks — will go to a program to support research into making ethanol from sources other than corn.
"What we'll do is roll back the subsidies to Big Oil and use the resources to invest in a reserve for research in alternative energy," Pelosi, a California Democrat, recently told reporters.
But the oil issue likely to be first out of the legislative gate in January concerns the ability of the federal government to recover royalties many lawmakers believe have been unfairly avoided by oil and gas companies drilling in deep waters of the Gulf of Mexico.
The Interior Department has been trying to get more than 50 companies to rework 1998-99 drilling leases that allow the companies to avoid paying billions of dollars in royalties because of a government mistake in writing the leases. Five companies recently agreed to a compromise to pay royalties on future production under the leases, but not from oil and gas already taken from the federal waters.
Most of the other companies argue that the leases represent a binding contract and have not even talked to Interior officials about them.
The industry intransigence has upset many in Congress, both Republicans and Democrats, who say they want to find a way to force the companies back to negotiations on the flawed leases. One approach is legislation barring companies from bidding on future leases unless they agree to renegotiate the flawed ones.
"There will be a new cop on the beat to force every big oil company that is currently lining its pockets with taxpayer dollars to come back to the negotiating table," Rep. Edward Markey, D-Mass., declared.
Pelosi calls the royalty avoidance from the 1998-99 leases the biggest oil industry subsidy issue she intends to tackle early. Congressional estimates have put the potential royalty loss at as much as $10 billion over the life of the leases.
Members of both parties also have said they want to make another stab at passing a federal law against oil company price gouging, an issue that will gain momentum should oil and gasoline prices again soar amid huge industry profits.
At the top of the hit list is a tax break that was aimed at promoting U.S. manufacturing but has provided a windfall for the oil industry as well. The provision reduces the corporate tax rate on profits from products made in the United States.
As for oil companies rolling in profits with $60-a-barrel crude, it is "a break they didn't earn, deserve or need," says Rep. Jim McDermott, D-Wash. McDermott tried to eliminate the tax break in May but was unsuccessful. He estimates that oil companies are saving as much as $700 million in taxes a year because of it.
Executives of the largest oil companies have said they don't need those tax breaks and do not oppose their repeal. Congress earlier this year already eliminated the tax incentive on exploration for the five largest companies.
Reading this, you'd think that the DEMS have a lock on every vote in the House and Senate. "OUR WISH IS OUR COMMAND".
Instead, they have a hair thin majority -- even slimmer than the REPUBS before.
Sounds like a lot of whistling past the graveyard of dead
aspirations.
Expect a $1 more a gallon...but hey...IT'S CONSERVATION!!!
What don't the rats just nationalize the oil companies and get it over with?
Translation: Democrats plan to cripple energy production by over-taxing the industry and funding alternatives that won't work.
Dumb, dumber, and dumbest.
At the top of the hit list is a tax break that was aimed at promoting U.S. manufacturing but has provided a windfall for the oil industry as well. The provision reduces the corporate tax rate on profits from products made in the United States.
I have a suggestion: Promote U.S. manufacturing and all other businesses by reducing corporate tax rates to zero.
Proof that there is no pool of cash in existence that the Democrats would not find, seize, and spend for you.
The profit margin for Exxon (XOM) is a little less than 12%. Revenues minus operating costs leave this percentage.
Most newspapers believe this to be paltry--at least until the last few years--and profit margins in this area were easily 20% in a good year.
Congress and state legislatures have no problem in making more money off gasoline than XOM does.
Congress can kill the energy industry by trying to force changes the economy cannot afford. Windmills don't even sell in Massachusetts.
The real "windfall profits" are in the government and in the mass media.
Maybe the Dems should use the record profits on Wall Street to fund social security rather than raising taxes on the masses.
Ultimately, the consumer will wind up paying more for petroleum products to cover any new taxes. So, how is this going to penalize the oil companies?
What they'll do is cost the consumers a bundle, as the oil companies will NOT lose money, and thus the Democrats sneak in yet ANOTHER hidden tax.
This will just be the start of MANY consumer price increases via taxing "big business", and the MSM-watching fools believe it is some rich bastard that actually PAYS for the tax!
Big Oil is not subsidized by the Government. If it were, many more would have stayed in business back in the oil bust decade. I would check the definition of "subsidies" when used by the dems about "big oil".
This jack-ass sounds like Bill O'Reilly.
But it will FEEL good!
Shhhh. Be vewy quiet. Reality is painfull to the uneducated.
You hit the nail on the head. Trouble is the sheeple are too easily overwhelmed with large profit figures and will never look at the nuts and bolts.
Profits in finance and pharmceuticals far exceed that of the oil industry.
That's a great point. But, they're speaking "Liberalese", which is where a tax hike that's not as big as they (the Liberals) want, it becomes a tax cut....and when offshore drilling royalties are not as high as the Liberals want, it's called a "subsidy"....
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