Senate Democrats and Republicans today moved forward with proposals designed to combat record-high gas prices, even though both have little bipartisan appeal and have scant hope of becoming law. Democrats unveiled a plan that sets up an Energy Independence and Security Trust Fund to be financed by a repeal of $17 billion in oil and gas industry tax incentives and a 25 percent windfall profits tax on the five biggest oil companies. The trust fund would finance renewable energy development, energy efficiency technology and consumer price protection, according to a summary of the plan. The windfall profits tax would hit those companies that "fail to invest in increased capacity and renewable energy sources," according to their statement. It would not apply to profits used for "clean, affordable, domestically produced renewable fuels, expanding refinery capacity and utilization, or renewable electricity production."
The White House and most Republicans, however, are staunchly opposed to repealing billions in oil and gas incentives or a windfall profits tax. Lawmakers in both parties have gone against the Bush administration in advocating a suspension in the filling of the Strategic Petroleum Reserve, given record oil prices. The Democrats are proposing to suspend deposits into the reserve as long as the price of crude oil stays above $75 a barrel. It is currently near $122 a barrel. Senate Republicans have their own gas price plan, which advocates suspending filling the reserve for 180 days.
Democrats are proposing an anti-price-gouging plan that gives the president the authority to declare an energy shortage emergency and makes it a crime to set "unconscionably excessive" prices. They are also pitching again a plan to allow the United States to sue the Organization of Petroleum Exporting Countries for manipulating prices. The White House has previously threatened to veto the plans. In addition, Democrats have called for a two-step strategy to stop speculation in the oil futures market. It would prevent traders of U.S. crude oil from routing transactions through offshore markets to evade speculative limits and installs reporting requirements. It also requires the Commodity Futures Trading Commission "to set a substantial increase in the margin requirement for all oil futures trade, contracts or transactions," according to the summary.
Senate Republicans, meanwhile, offered their gas price plan today as an amendment to flood insurance legislation on the floor. Minority Leader McConnell filed a cloture petition on the amendment, which would include measures such as drilling in the Arctic National Wildlife Refuge and off the Atlantic and Pacific coastlines, which Democrats have successfully blocked. The 180-day suspension of the filling of the petroleum reserve is also included.
This article appeared in the Saturday, May 10, 2008 edition of National Journal Daily.
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