The poor oil companies.....

Captain Slow IRL

Courtesy of Yahoo news:

WASHINGTON - Senate Republicans on Thursday blocked a $32 billion package of tax breaks for renewable energy that would have been financed mostly by new taxes on major oil companies.

Democrats came three votes short of overcoming a threatened GOP filibuster that was keeping the measure from being attached to a broader energy bill. Republican senators argued that the nearly $29 billion in additional taxes on major oil companies would have led to reduced production and higher gasoline prices.

Because of Republican opposition, Democrats needed 60 votes to allow the package to come up for a vote, but fell short, 57-36. With a number of senators not voting, Democrats could resurrect the measure later, though there was no immediate indication of that.

The tax proposal had some bipartisan support, but also attracted sharp criticism from many Republican senators who lined up against it.

Senate Majority Leader Harry Reid, D-Nev., said he intends to proceed with consideration of the energy legislation with or without the tax measures. "There are still good things in the bill," he told reporters before the floor vote.

The Senate later voted 61-32 to proceed further with the energy legislation.

Senators hoped later in the day to take up a proposal to increase automobile fuel economy, which has been the focus of intense closed-door discussions in an effort to fashion a compromise that would garner enough votes to overcome strong opposition from the auto industry.

The massive tax measure marked a sharp turn from longtime congressional support of the oil industry to promoting alternative energy development and moving toward energy sources that would help deal with the growing concerns over global warming.

But Republicans complained that it was too harsh on the oil industry and could lead to oil companies reducing investments in new oil refineries and production. They also said that it could lead to higher prices for consumers.

"When you put a tax on a business it gets passed on to consumers," argued Sen. John Kyl, R-Ariz. "Instead of reducing gasoline prices, this bill is going to add to the cost of gasoline."

Kyl had earlier sought to sidetrack the tax measure, but that effort failed.

The bill's supporters dismissed suggestions that the new taxes on an industry that has had record profits in recent years would cause either less oil production or lead to higher prices at the pump.

Oil companies earned $111 billion in profits last year and at that rate stand to earn $1 trillion over the 10 years covered by the tax package, said Sen. Jeff Bingaman, D-N.M., rejecting suggestions that "this is an undue burden" on oil companies.

Sen. Max Baucus, D-Mont., whose Finance Committee crafted the tax package, said the incentives for renewable and alternative fuels "will help wean ourselves away from OPEC ... from these very high gas prices."

The tax changes would have channeled $11 billion over 10 years into development of renewable fuels such as ethanol, biodiesel and power from wind turbines. It provides an additional $18 billion in other tax breaks — from tax credits to clean and renewable energy bonds — to support improvements in energy efficiency, clean coal technology, development of gas-electric hybrid cars that could be plugged into the national power grid and other alternative energy programs.

Major oil companies would have paid most of the tab.

For example, the measure would have rescind a tax break given oil companies in 2004 which was primarily aimed at helping domestic manufacturing; increase taxes paid under an oil spill liability law; and eliminate existing tax credits involving foreign oil production.

Another measure also would have imposes a new excise tax on oil produced from the Gulf of Mexico to recoup $10.7 billion in royalties that the government has been unable to retrieve because of flawed oil leasing contracts issued in 1998-99.

mike65

Wrong forum?

Mike.

Captain Slow IRL

Feel free to move this if you see fit - I thought it was relevant!