Wednesday, December 05, 2007

House Dems Push for RPS and Renewable Energy Tax Package; Energy Bill Showdown Expected in Senate; Veto Looms

It's time to install wind turbines in the halls of Congress; you could power several thousand homes with the hot air blowing out of Washington this week on the federal energy bill, and things are only starting to heat-up.

Just when it looked like the House had abandoned plans for a federal renewable portfolio standard (RPS) and an important renewable energy tax package, Speaker Nancy Pelosi announced that both measures will be included in the final bill. According to the AP:
House Speaker Nancy Pelosi intends to push ahead with a $21 billion tax package, including repeal of tax breaks for major oil companies, as part of an energy bill, aides to the speaker said Tuesday. Democratic leaders circulated a summary of the legislation that includes the new taxes as well as a requirement for a 40 percent
increase in automobile fuel efficiency, a huge increase in the use of ethanol as a motor fuel, and a mandate for utilities to use renewable fuels.

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The House draft bill, expected to come up for a vote as early as Thursday, calls for repealing $13.5 billion in tax breaks given to major oil companies in 2004 and 2005 and another $7.5 billion in various non-energy tax increases and adjustment to raise revenue needed for the new energy programs, aides said. They spoke on condition of anonymity because a final bill was still being crafted. ``We are repealing tax breaks for profit-rich oil companies so that we can invest in clean renewable energy'' a summary notice to Democratic lawmakers said. Drew Hammill, a spokesman for Pelosi, confirmed that the energy package will include the sizable tax provision. ``It's in there,'' he said.
The Speaker's announcement has set off a new round of chest-thumping rhetoric from politicians opposed to both measures. E&E Daily reports that Republican Senators are threatening "war" (subscription required) if the legislation repeals tax subsidies previously handed-out to oil and gas companies or includes a federal RPS :
Sen. Pete Domenici (R-N.M.), the top Republican on the Senate Energy Committee, said the auto mileage and biofuels provisions are "great for America," but he thinks the other two additions sully the bill. "If it comes over here, we have no alternative but to have war," he told reporters. "I believe the bill will not pass with those two provisions on it," Domenici added. "We will do everything we can to see that it doesn't." Sen. Kay Bailey Hutchison (R-Texas) predicted the bill would not pass with the tax and utility language, and Senate Minority Leader Mitch McConnell (R-Ky.) has also voiced opposition.
And the White House has taken several opportunities this week to re-emphasize the President's opposition to legislation with either measure. Energy Secretary Samuel Bodman recently told reporters that "it is wrong to single out an industry, the oil industry or any industry'' for new taxes (although it's OK, apparently, to single out the oil industry for favorable tax subsidies). And earlier this week in a letter to Speaker Pelosi, Allan B. Hubbard, director of the National Economic Council, threatened a Presidential veto, saying that "it appears Congress may intend to produce a bill the President cannot sign."

At the very least, democrats' move on the tax measure will likely delay any action on the energy bill, according to the Wall Street Journal (subscription required).

Hill Heat has the summary of the new energy bill circulated by democratic leaders.

More to come as negotiations on this bill continue. In the meantime, someone should look into the potential for siting one of these in D.C. - you won't even need the solar panels.

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