Tuesday, August 16, 2005; 12:01 AM
As was the case with the Bush administration's passage of the sweeping overhaul of bankruptcy laws a few months ago, the newly signed energy bill will serve as a multibillion-dollar boon to some of the GOP's staunchest corporate contributors.
That doesn't mean it won't eventually end up helping consumers. It may or may not encourage domestic oil exploration and promote alternative energy sources as it's intended to do.
But the bill will do little to ameliorate the pain Americans are feeling at the pump. In signing the measure, Bush acknowledged as much. "This bill is not going to solve our energy challenges overnight," Bush said. "It's going to take years of focused efforts to alleviate those problems."
White House spokesman Scott McClellan expanded on that sentiment in an interview on Wednesday, portraying the bill as a bold step toward a comprehensive energy strategy that will reduce America's dependence on foreign sources of energy.
"The credits for oil and gas exploration came in at around $1.1 billion," he said. "The tax credits for conservation and renewables and energy efficiency came in at over $4 billion. So more than four times are going to renewables and energy efficiency. And in addition there are tax credits for hybrid fuel cars that the president has touted, there's tax credits for clean coal technology."
You'd almost think Bush's next campaign was going to be for the presidency of the Sierra Club.
White House Accounting Incomplete
At a time when oil industry revenues are soaring, and oil is topping out above $65 a barrel, some are wondering why the industry needs so much government largess.
"The newest numbers from the second quarter of this year show Exxon Mobil with a 32 percent increase in earnings over this time last year -- that's more than $7.6 billion," ABCNews.com reported on Thursday. "BP saw a profit increase of 38 percent, totaling $6.7 billion, while Conoco Phillips -- the third largest oil company in the country -- recorded a 56 percent increase in profit, more than $3 billion."
Even Bush originally preferred an energy bill with a far larger percentage of money going to renewables and energy efficiency. "I will tell you with $55 oil we don't need incentives to oil and gas companies to explore," Bush said in a speech to newspaper editors in Washington in April. "There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent." Yet Bush signed the legislation and hailed it as a victory.
"I think there's no doubt that this bill reflects the worst of Washington politics," said Anna Aurilio, legislative director for the nonpartisan, left-leaning U.S. Public Interest Research Group. "It's Christmas in August for the big energy companies, and the consumers get lumps of coal. There's really nothing to cheer about by anyone who gets a utility bill or has to fill up a gas tank. The energy lobbyists are the big winners, and the rest of us are left in the dust choking."
Aurilio, who sat through the House and Senate committees' markups on the bill, says McClellan is playing funny with the numbers. According to PIRG's reading of information provided by the Joint Committee on Taxation, the tax break for the oil and gas industry comes out closer to $1.7 billion, but even that only hints at the total value of savings to that sector. If you include all of the subsidies and incentives such as the waiving of royalty payments for drilling in the Gulf of Mexico, the total figure is close to $4 billion.
Nor did McClellan mention the more than $10 billion in credits and breaks to the coal, nuclear and utility industries.