Lawmakers intensified their shootout over oil yesterday, with House Republicans passing a bill to enhance drilling while Democrats launched a plan to rescind tax breaks for major oil companies and invest in cleaner transportation.
The dueling initiatives come as both sides strike an aggressive tone on rising gasoline prices and controlling the national deficit, though both plans are largely symbolic. They also provide a backdrop for the arrival on Capitol Hill today of leading oil executives, who were summoned to defend tax deductions that Democrats say amount to $4 billion annually.
Minority Leader Nancy Pelosi (D-Calif.) and other Democrats unveiled an energy package yesterday afternoon that builds on a plan released last week to rescind tax deductions for the oil and gas industry amounting to $31 billion over 10 years.
The plan, dubbed "Clean Energy Jobs Now," combines a series of existing bills that call for the expansion of natural gas and electric vehicles, and the installation of fueling and charging stations. It offers a variety of incentives, including a $64,000 tax credit for the purchase of semi trucks, buses or cement trucks that run on natural gas.
Rep. John Larson (D-Conn.), the author of H.R. 1380, or the "NAT GAS Act," said that converting one 18-wheeler to natural gas saves the amount of gasoline consumed by 300 cars.
The Democratic package would also extend the investment tax credit for building charging and fueling stations that provide electricity, ethanol, hydrogen, biodiesel and natural gas, according to a summary of the bill. The tax credit, worth 50 percent of project, would last through 2014.
Parties angle for message on gas
It also adopts H.R. 1730, the "Vehicles for the Future Act," authored by Rep. Jerry McNerney (D-Calif.), and H.R. 1742, the "Electric Vehicle Infrastructure Act," introduced by Rep. Anna Eshoo (D-Calif.) Those bills focus on fueling infrastructure for cleaner cars, with the focus on "making electric charging stations or battery exchange locations as common as gas stations," the summary says.
"American consumers are paying a big price at the pump, with gas prices going sky high, while oil companies raked in $30 billion in profit in the first quarter," Pelosi said yesterday. "But Republicans keep insisting that taxpayers continue to give tax subsidies to Big Oil."
Those plans collide with Republican aspirations to slash spending and increase domestic drilling. Some Republicans have indicated they could support repealing some oil and gas tax deductions, in the context of closing an array of tax loopholes that cost the country about $1.1 trillion a year.
But many have also defended the oil companies against the barrage of Democratic attacks. GOP leaders have largely adopted the industry's claim that the elimination of tax deductions amounts to a tax hike, which can cool development and harm the economy. Instead, they blame the Obama administration for delaying domestic drilling.
"We are focused on trying to do everything we can to bring down gas prices," said Virginia Rep. Eric Cantor, the Republican majority leader, in a statement. "This Administration continues to be an impediment to energy production here at home. The bills that we will bring to the floor this week say, stop we need to have maximum energy production here to bring gas prices down and we can do that."
Yesterday, the House passed H.R. 1229, which would hasten the review of drilling permits while jump-starting dozens more that were delayed after the BP PLC oil spill in the Gulf of Mexico last year. It passed 263-163, with the help of 28 Democrats.
Shaming GOP and blaming Dems
It follows the passage last week of another bill that would open new areas to drilling on the outer continental shelf along the East Coast and in the Gulf. The measures convey Republican frustration with President Obama, who they claim is delaying expanded drilling when gas prices are soaring.
The White House issued a terse warning yesterday about the drilling bill passed last week. But it withheld the threat of a veto, probably because the measure won't be considered by the Senate.
The legislation, the White House said, would require the Interior Department to open new areas for drilling "without any discretion to determine which areas are actually appropriate and safe for exploration and development."
"The bill would have the effect of mandating OCS lease sales along the entire East Coast, offshore California, and elsewhere, without providing states and local citizens the opportunity to share views about where exploration should happen," the White House said.
The tactics by both parties emphasize political maneuvering over legislative accomplishment, and probably foreshadow energy themes in election campaigns: expanded domestic drilling versus accelerated clean energy development.
Obama initiated that message in the State of the Union address, in which he unveiled an ambitious plan to double the nation's use of low-emission power by 2035 using a clean energy standard -- the type of government mandate that Republicans detest.
Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) and Sen. Robert Menendez (D-N.J.) publicized a letter they sent to Senate Republicans yesterday encouraging them to support legislation that applies oil subsidies to the deficit. A vote on the measure, which cancels $21 billion in tax deductions over a decade, could come next week. But the likelihood of passage is remote.
"The Big 5 oil companies have made nearly $1 trillion in profits in the last decade -- and more than $30 billion of that in the first three months of this year alone," the letter says. "At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline. We simply cannot solve our budget problems by asking working class families to shoulder the burden alone."
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