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Congress Slashes Tax Breaks for Domestic Oil Companies

posted on January 19, 2007

Hello, I'm Mark Pearson. Mother Nature made her presence known again this week, as a lethal combination of frigid temperatures and icy roads claimed more than 50 lives nationally. A large trough of Arctic air placed the Midwest in the deep freeze, while snow and ice storms crippled motorists and left thousands without power in parts of Texas, Oklahoma and Missouri. Abnormally low temperatures have also wreaked havoc in California, prompting Governor Schwarzenegger to seek federal disaster aid this week for the state's citrus industry. Officials estimate as much as 70 percent of this year's crop -- nearly $1 billion worth of fruit -- is ruined. In Washington though, the storms this week were of a political nature. And the winds of change blew through Congress, where democrats capped their "100-hour agenda" with a flurry of legislation. With House Speaker Nancy Pelosi at the helm, the Dems sailed through a "perfect storm" of bills that included a measure aimed at pumping money from "Big Oil" to renewable energy.

Congress Slashes Tax Breaks for Domestic Oil Companies

The plan sought to roll back tax breaks for large oil companies and invest those funds into a reserve account for renewable energy resources such as ethanol and wind power.

The Democratic plan to slash tax breaks was met with strong opposition from Republicans that claimed domestic oil companies will suffer a serious economic blow as foreign oil corporations prosper.

Mike Rogers, R-Michigan: "You make it more expensive to refine gasoline in the U.S., and this bill does it, they'll buy it offshore."

George Miller, D-California: "At a time when countries are out trying to get to these resources we suggest the only way we can get people to drill in the most secure area in the entire world is to give them a subsidy. The national security of the United States is a subsidy they get when they drill here. They don't need additional subsidies."

Democrats claim the bill could produce as much as $15 billion in revenue. Collin Peterson, the chairman of the House Agriculture Committee, said the funds will have a direct impact on this year's farm bill – especially in the development of an energy title.

Collin Peterson, D-Minnesota: "The funds created in the energy reserve help us establish farm bill policy that will move us closer to energy independence."


Tags: alternative energy biofuels Congress ethanol news oil renewable fuels