House Democrats Detail Energy Plan
Saturday, January 13, 2007
House Democrats introduced the energy piece of their legislative agenda, a measure that would curtail tax breaks and incentives for oil and gas companies and invest the funds in renewable energy.
The bill is projected to raise $13 billion in revenue over five years, and would set that money aside in a "fund" to be used for spending and tax breaks for renewable energy sources, not including nuclear power.
Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) and Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) introduced the bill, which trims breaks for geological work and excludes oil and gas from a 2004 measure that would effectively reduce their tax rate to 32 percent, from 35 percent.
It also takes aim at oil and gas companies that signed federal leases in 1998 and 1999 with incentives for offshore exploration in deep water. Those leases neglected to include price thresholds. As a result, the leaseholders do not pay royalties regardless of how high oil and gas prices soar.
The House measure says companies with those leases cannot bid on new federal leases unless they renegotiate the contracts or pay "conservation" fees of $9 a barrel on oil and $1.25 per thousand cubic feet on gas produced under the old leases.