U.S. Democrats introduce energy plan to promote renewables

WASHINGTON, DC, US, January 17, 2007 (Refocus Weekly) The Democratic chairmen of two committees in the U.S. Congress have introduced legislation to curtail tax incentives for oil and gas companies and to invest funds in renewable energies.

As part of first legislative agenda for Democrats in the House of Representatives, Nick Rahall (West Virginia), chairman of the Natural Resources Committee, and Charles Rangel (New York), chairman of the Ways & Means Committee, introduced HR 6, the ‘Creating Long-term Energy Alternatives for the Nation (CLEAN) Act.’ The bill would raise US$13 billion over five years, to be used in a fund to provide support and tax breaks for renewable energy sources, not including nuclear power.

The proposed legislation includes two components that will roll back tax benefits and federal oil and gas leasing provisions included in the Energy Policy Act of 2005. It would also amend leases issued by the Department of the Interior between 1998 and 1999 which, if left unchanged, could cost the federal treasury $60 billion over the next 25 years, the two Democrats claim.

“We are rolling back subsidies for big oil to invest in alternative energy and find solutions to our nation’s energy problem,” says Rangel. “In order to reduce our dependency on foreign oil, we need to stop lining the pockets of oil corporations and rewarding our enemies in the Middle East.”

The legislation would “reduce our nation’s dependency on foreign oil by investing in clean, renewable and alternative energy resources, promoting new emerging energy technologies, developing greater efficiency, and creating a Strategic Energy Efficiency & Renewables Reserve to invest in alternative energy,” explains HR 6.

The Strategic Energy Efficiency & Renewables Reserve would be available to “accelerate the use of clean domestic renewable energy resources and alternative fuels; promote the utilization of energy-efficient products and practices and conservation; and increase research, development, and deployment of clean renewable energy and efficiency technologies.”

“The American people are owed a fair value for the resources they own yet, when the government gives tax breaks in the form of royalty relief to Big Oil and fails to accurately monitor its oil leasing programs, it is the American people who are footing the bill,” adds Rahall. “This carefully-crafted legislation we are introducing today will address the broken royalties system that has plagued the Interior Department, and put these payments right back where they belong - in the federal treasury.”

The legislation would reduce tax breaks for geological work and excludes oil and gas from a 2004 measure that would effectively reduce their tax rate to 32% from 35%. It also addresses oil and gas companies which signed federal leases in 1998 and 1999 with incentives for offshore exploration in deep water, but the leases neglected to include price thresholds and, as a result, leaseholders do not pay royalties regardless of how high oil and gas prices soar, the two politicians claim.

The House measure says companies with leases should not be allowed to bid on new federal leases unless they renegotiate their contracts or pay ‘conservation fees’ of $9 a barrel on oil and $1.25 per thousand cubic feet on gas produced under the old leases.


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