|
House energy bill full of tax breaks for energy corporations { April 22 2005 } Original Source Link: (May no longer be active)
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/04/22/MNG45CDDBS1.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/04/22/MNG45CDDBS1.DTL
House OKs energy bill laden with tax breaks
Measure seeks to build up domestic oil production
- Zachary Coile, Chronicle Washington Bureau
Friday, April 22, 2005
Washington -- The House approved an energy bill Thursday that will provide billions of dollars in tax breaks to boost domestic energy production, over the objections of lawmakers who called the measure a costly giveaway to the energy industry.
The Republican-controlled House easily passed the bill on a 249-183 vote, despite fights over drilling in the Alaskan wilderness and whether to protect the oil industry from lawsuits over the fuel additive MTBE, which has contaminated drinking water in states from California to Maine.
The bill increases the chances that oil companies will be allowed to drill in the Arctic National Wildlife Refuge in Alaska. The Senate, which had previously blocked Arctic drilling, voted narrowly last month for a budget resolution that would allow the Bush administration to begin selling oil and gas leases in the refuge.
But the MTBE liability provision and the cost of the subsidies could become major sticking points when the Senate takes up the energy bill next month. The House has passed an energy bill for four straight years, only to see the measure fail in the Senate.
Sen. Barbara Boxer, D-Calif., vowed that Senate Democrats would try to defeat the bill or at least strip provisions such as the liability shield for the manufacturers of the additive methyl tertiary butyl ether, known as MTBE.
"It's a toxic bill," Boxer said. "They have given billions of dollars of tax breaks to the very energy companies that are making a fortune."
Boxer added, "The MTBE issue is a shame upon the House. To give a liability waiver to people who make that poison ... is to put this on the backs of the communities and local taxpayers. It's so egregious."
Proponents of the measure hailed the vote as the first step toward reducing the nation's growing dependence on foreign oil, much of it from politically volatile regions including the Middle East and parts of South America.
"This bill spends capital at home to produce our own energy, create jobs and lessen our dependence on foreign sources of oil," said House Resources Committee Chairman Richard Pombo, R-Tracy. "America needs American oil until a fuel for the future is developed in an affordable and abundant fashion. We cannot conserve our way out of an empty tank of gas."
The bill has become increasingly expensive as it moved through several House committees in recent weeks as lawmakers and lobbyists for the energy industry tacked on extra provisions. The bill includes $8.1 billion in tax breaks as well as more than $80.8 billion in authorized or directed spending, according to an analysis by the watchdog group Taxpayers for Common Sense.
"It's further proof that lawmakers are not serious about being fiscally responsible at a time when our country is being smothered by mountains of debt, " said Keith Ashdown, vice president of Taxpayers for Common Sense.
Even President Bush has complained about some of the bill's subsidies, telling an audience of Hispanic business owners this week, "With oil at more than $50 a barrel ... energy companies do not need taxpayer-funded incentives to explore for oil and gas."
But the president, who began pushing for the bill with Vice President Dick Cheney's energy task force four years ago, has been urging Congress to send him the legislation, especially as polls show widespread public frustration at the rising costs of gasoline.
"I commend the House for taking an important step to secure our energy future," Bush said after the vote. "I look forward to swift Senate action so that I can sign a bill into law by August."
House Democrats complained that the bill was too heavily focused on oil, gas, coal and nuclear energy, although it also authorizes more than $2 billion in subsidies for renewable energy sources such as wind and solar power.
Lawmakers also complained that GOP leaders refused to consider Democratic proposals for increases in Corporate Average Fuel Economy standards, or CAFE, which they claim would conserve more fuel than drilling for oil in the Arctic refuge in Alaska.
The most dramatic moments in the debate came Thursday when Rep. Lois Capps, D-Santa Barbara, introduced an amendment alleging that the bill presented an unfunded mandate on local communities because of the MTBE provision.
Capps cited an analysis by the nonpartisan Congressional Budget Office that found that the liability shield could reduce the amount of money local communities and states could win in potential legal settlements or jury awards against the manufacturers for allegedly contaminating water supplies. About 80 such lawsuits have been filed.
Republicans countered that the defective product lawsuits would only exacerbate the problem by forcing the industry and the plaintiffs to spend millions of dollars on legal fees rather than on cleaning up contaminated sites.
"The problem is not going to be solved by filing lawsuits, by scoring political points, by paying huge legal fees to the trial bar," said Rep. Charles Bass, R-N.H., who backs a taxpayer-supported fund to help pay for the cleanups.
But Democrats described the liability shield as a giveaway to the industry, noting the bill also contains $2 billion in transition assistance to help MTBE makers convert their facilities to produce new fuel additives, now that the additive has been banned.
"It lets the industry off the hook," said Rep. Anna Eshoo, D-Atherton. "It relieves the industry of any obligation to pay even a portion of the estimated $29 billion in the cost of cleaning up drinking water that has been contaminated by this product."
Capps' MTBE amendment failed, 219-213.
The energy bill would phase out MTBE by the end of 2014, although California and many other states have already banned the clean-air additive. The measure instead requires refiners to use 5 billion gallons of corn-based ethanol by 2012, a mandate many California lawmakers have criticized as a giveaway to corn farmers in the Midwest.
While some of the subsidies in the bill kick in only when energy prices are low, critics complained that 93 percent of the bill's tax breaks were devoted to fossil fuels and nuclear energy, with 7 percent for renewable energy.
"This bill does nothing to reform our irresponsible energy policies at a time when change is vital in order to end our dependence on foreign oil and keep our air and water clean for future generations," said Rep. Ellen Tauscher, D-Walnut Creek.
--------------------------------------------------------------------------------
Energy legislation
Here are some of the provisions of the energy bill approved Thursday:
-- Open the coastal plain of the Arctic National Wildlife Refuge in Alaska to oil drilling.
-- Provide $8.1 billion in tax breaks, mostly for oil, gas, nuclear, coal and electric utilities over 10 years.
-- Require refiners to use 5 billion gallons of corn-based ethanol by 2012, a 20 percent increase over what the industry is expected to produce this year.
-- Expand daylight saving time by two months, so it would start on the first Sunday in March and end on the last Sunday in November.
-- Provide product liability protection for the makers of the gasoline additive MTBE against lawsuits stemming from contamination of drinking water. Pay $2 billion in transition costs over eight years to manufacturers as MTBE is phased out.
-- Give the Federal Energy Regulatory Commission clear authority to override states and local officials in locating liquefied natural gas import terminals.
Source: Associated Press
E-mail Zachary Coile at zcoile@sfchronicle.com.
Page A - 1
|
|
