Are Tea-Party Republicans Really Trying to Kill Oil-Industry Tax Breaks?
GOP Sen. Mike Lee is pushing a bill that his office says would restore "free-market competition" in energy by killing "all tax credits for both renewable and traditional energy sources."
"Washington should not be using taxpayer money to pick winners and losers in the energy industry," said Lee, a Utah Republican, in a statement. But does the oil-and-gas industry have anything to fear? Not really.
The bill, which Republican Rep. Mike Pompeo of Kansas has long pushed in the House, would end billions of dollars worth of tax credits that the wind industry has long relied on. It would also do away with an array of other renewable and green-technology tax credits, such as incentives for biofuels and electric cars.
Yet the oil-related provisions of the bill would barely graze the industry. It would end a pair of tax credits for so-called enhanced oil-recovery techniques at older wells and extracting oil and gas from low-production "marginal" wells.
Both those credits are only in effect when energy prices are below certain points. In fact, according to the Congressional Research Service, the marginal-well credit has never been used since its enactment in 2004.
Neither credit looks to be worth much going forward. According to the Joint Committee on Taxation, stripping those two credits would not raise any new revenue over the next decade. In other words, for advocates who say the oil industry gets too many favors in the tax code, these credits aren't even close to the main target.
Indeed, the tax incentives most prized by the industry aren't actually credits at all and aren't touched by the Lee-Pompeo bill, which has the support of conservative groups like the Koch-backed Americans for Prosperity, Americans for Tax Reform, the Club for Growth, and others.
The White House budget and various Democratic bills, in contrast, would strip those credits but also separate tax benefits worth billions of dollars, such as quick write-offs for drilling costs and deductions on income from oil and gas production.
TOP ENERGY NEWS
DOE ANNOUNCES GAS RESERVE. To prepare for fuel shortages like the ones that emerged in the aftermath of Hurricane Sandy, the Energy Department announced plans today to create two regional gasoline reserves in the Northeast. The reserves—one in New England and one in New York Harbor—will each store 500,000 barrels of gasoline to provide short-term relief in the event of any shortage.
Exactly what I need as a busy college student."
"Like sandbags and stockpiles of food and medicine, this gasoline reserve is what the Northeast needs to be ready for supercharged storms from climate change," said Sen. Edward Markey of Massachusetts, who joined Energy Secretary Ernest Moniz in making the announcement.
ETHANOL USE LINKED TO OZONE POLLUTION. Researchers studying cars in Sao Paulo, Brazil, found that as drivers switched from ethanol to gasoline, levels of ground-level smog, or ozone, dropped in the city. The study, published in Nature Geoscience, is the first large-scale study of ethanol use and air pollution and counters several studies that predicted cleaner air from ethanol fuel, although most relied on computer models. (Neela Banerjee, Los Angeles Times)
ENERGY COMPANIES DON'T LIKE TO SHARE. The Transportation Department said Friday that only three companies have so far complied with a request by the federal government that they share crude-oil testing data in the wake of a series of crude-by-rail accidents. So far the feds report the only companies that have coughed up the data are Exxon Mobil, Continental Resources, and Savage Services. (Russell Gold, Wall Street Journal)
LAFLEUR GETS PRESIDENTIAL NOD. President Obama has renominated Cheryl LaFleur to serve as a commissioner for the Federal Energy Regulatory Commission. LaFleur is the acting chair of the FERC. (Laura Barron-Lopez, The Hill)
HERITAGE TO SCORE SHAHEEN-PORTMAN. Heritage Action for America said Friday that it is urging a "no" vote on the Shaheen-Portman energy-efficiency bill and will include it on its legislative scorecard if the bill reaches the floor next week. The bill's efficiency incentives "would burden taxpayers and consumers alike while producing no tangible benefits," Heritage Action said in a release.
BAD NEWS FOR TRANSCANADA. The Canadian energy company saw a decline of 8 percent in first-quarter profits. (Judy McKinnon, Wall Street Journal)
POLLUTION HITS A NEW HIGH. Data from the Scripps Institution of Oceanography at the University of California (San Diego) shows that atmospheric levels of carbon dioxide exceeded an average of 400 parts per million in April, a new global record. (Alex Morales and Christopher Martin, Bloomberg)
NEW LINE OF ATTACK AGAINST EPA STANDARDS. The American Legislative Exchange Council, the free-market group that draws some funding from oil and coal companies, has coordinated to have state attorneys general bring lawsuits against EPA regulations. (Suzanne Goldenberg, The Guardian)
EUROPE TO HOLD GAS HUDDLE. European Union officials are organizing talks to discuss natural-gas prices with Russia and Ukraine in an effort to halt any potential supply disruption. The talks come as Russian oil giant Gazprom demands that Ukraine pay early for June deliveries and pay back its debt to the company. (Associated Press)
WILDFIRE SEASON IS GOING TO BREAK THE BANK. The Interior Department and the U.S. Forest Service estimate that they'll pay out close to $2 billion to quell wildfires this season, an amount that's set to exceed the cash set aside by Congress to combat the blaze. Agency officials say climate change is to blame. (Timothy Cama, The Hill)
PODESTA POUNDS PAVEMENT. One of the perks of White House senior counselor John Podesta's new job? "I can do the job around my 2014 race schedule," Podesta told Runner's World in an interview that touches on why he loves running in National Parks, his Progressive Ninjas team, and his regrets of not getting in a run while helping then-President Clinton release two imprisoned American journalists from North Korea. (Caleb Daniloff, Runner's World)
WHAT INSIDERS ARE SAYING
WILL THE PRESIDENT PUNT ON KEYSTONE? What does Obama have to lose by delaying a final determination, and what does he stand to gain?
"President Obama has punted on Keystone XL for almost six years, sidestepping the decision at all costs. But given how the decision-making process has become consumed by politics—and devoid of facts—the latest setback is not at all surprising." —Brigham McCown, CEO, Nouveau.
CHESAPEAKE BAY HEARING. The Senate Environment and Public Works subcommittee on Water and Wildlife holds a field hearing in Conowingo, Md., to discuss environmental concerns associated with the Conowingo Dam and the health of the Chesapeake Bay.
WATER AND AGRICULTURE DISCUSSION. The Atlantic Council and the U.S. Chamber of Commerce host a discussion on the nexus of water, energy, and food and the risks to business.
CHINA CLEAN-ENERGY DISCUSSION. The Woodrow Wilson Center China Environment Forum hosts a book talk on Kelly Sims Gallagher's The Globalization of Clean Energy Technology—Lessons From China.
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