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.
No problem. The Democrats will get to the pharmaceuticals. They are just down the list a bit below the oil cos. Finance on the other hand is a cash cow for Democrat campaigns so they will get to keep their profits.
What exactly was the error in 1998/99 (Clinton years) that is causing this liberal outcry?
I can't remember any exact details....
All that I ask of the general public is, don't be in the 2/3rds that do nothing or worse. Because this time (if the tipping point is reach), will make CWI look like child's play.
5..56mm
Why not just let the oil concerns keep their own earnings and invest it themselves in new and different energy sources? And when those new sources are successful and profitable, let the Exxons and Texacos of the world keep the profits. If the new sources are unsuccessful , let the oil concerns absorb the losses.
Getting government bureaucrats into the business of trying to decide what kind of energy source can work and be profitable sounds like a recipe for failure and fiscal catastrophe.
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.
What are the chances that if the companies had signed lease agreements with the FedGov which had overpaid the FedGov, the government would come back to the table?
Zip nada zilch. Fat chance, slim chance all the same.
I am sure oil company attorneys reviewed the contracts. The wasted tax dollars were spent on the folks at Interior who drew up the agreements.
The initial royalty free deal (Clinton Era) was to get leases drilled when the price of oil was less than the lift costs, much less enough to pay for exploration drilling.
I only hope the Republicans have enough sense to kill this garbage and not suck up to the Socialist media hype. I would really, really, not want to have to go work overseas...
They have no right to sieze company profits for their own use. Fascists.
Well, you get it. Unfortunately, there is a large contingent of people out there ready to stick it to eeeevil "Big" whatever, especially tobacco (hurt the consumers, but that is only 20-25% of the population so that was OK, right?), "Big oil" which they will end up paying for, but "that'll show 'em!", right?
Big 'fat' is next on the radar, along with big 'drugs', etc.
It all reminds me of the way Putin and his cronies have been looting every successful capitalistic front venture over at the (former?) USSR. Or Chavez in Venezuela, or the Bolivians with the Natural Gas industry...
Maybe the Dems are just trying to keep up with the Socialist Joneses.
Quite right, and the additional costs will more adversely impact lower and middle-income earners. As these groups lose more purchasing power, then the Dems can turn around implement more wealth distribution to "close the gap." They get the "best" of both worlds - increased regulation/bureaucracy and increased taxes to fund their schemes. A truly vicious (and dangerous) economic circle.
Either : We'd be at a higher pay grade than they are, or we'd just quit, go home, and get reacquainted with the wife and kids.
Find one government employed person not in the military who will work 240-12 hour on, 12 hour on call on location- (24 hour) days in a calendar year, without set time off, vacation or sick days. Chances are I'd get them a job, if they are interested.
At over $60,000 a day for this operation, the government would take at least three times as long to get anything done, and then make a train wreck of it.
Keep in mind that these are the people who took over the Chicken Ranch in Nevada for taxes and couldn't make a go of it. If they can't successfully run a whorehouse, don't even let 'em on my drilling location.
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