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Two Bills Offer Insights Into an Energy Debate Two Bills Offer Insights Into an Energy Debate

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Two Bills Offer Insights Into an Energy Debate

A Senate vote set for Monday to repeal tax breaks for the country’s biggest oil and natural-gas companies will be an exercise in political messaging.

The bill, orchestrated by Senate Majority Leader Harry Reid, D-Nev., and sponsored by Sen. Robert Menendez, D-N.J., is virtually certain to fail, but its purpose is to put senators on the record regarding taxpayer subsidies for Big Oil.


Ironically, the same two senators are working on another energy bill that is almost the opposite of the seemingly doomed legislation to repeal the federal oil and gas subsidies, which are estimated to be anywhere from $4 billion to $40 billion per year, depending on how they are defined.

The other Reid-Menendez proposal, which also counts conservative Sen. Richard Burr, R-N.C., as a chief cosponsor, would create new subsidies for natural-gas-powered cars and trucks and would pay for itself by adding a temporary tax on natural-gas fuel.

The latter measure has political appeal in an election year plagued by high gasoline prices: It would help wean the transportation sector from oil and its uncontrollable price volatility. And unlike the oil-subsidies bill, the bipartisan natural-gas bill actually has a chance of passage, despite the fact that the Senate voted it down earlier this month.


More importantly for the bill’s chances in the Senate, the unusual alliance of Reid, Burr, and Menendez opens some doors that might otherwise be closed. Senate Minority Leader Mitch McConnell, R-Ky., doesn’t support the measure, but there was no organized effort by GOP leadership to whip against it when it came up for a vote earlier this month because that would have put Burr—the chief deputy whip for Republicans—in charge of whipping against his own bill.

“There’s not too many things that you see that are bipartisan, especially in the Senate,” said Sen. Joe Manchin, D-W.Va., at a National Journal event last week on natural gas. “When you see that Richard Burr, [and] we had Bob Menendez on the bill, and Harry Reid—my God, I would have voted for anything that had that group of people on it.”

But 47 senators—including six Democrats—didn’t see it that way when they voted against the legislation on March 13 as an amendment to the transportation bill. Even though the measure garnered 51 votes, it failed because it needed 60 votes to advance in a Senate where the threat of filibusters has become an everyday occurrence.

“I didn’t think it was quite ready to be implemented yet,” said Sen. Mark Pryor, D-Ark., who has supported a similar bill in the past but voted no this month. Lobbyists supporting natural-gas incentives also said the vote occurred before the bill was ripe and technical differences could be worked out.


The bill has a bigger problem, though: Some potential supporters say it’s just not necessary.

“At a time when we’re looking to reform our tax code by reducing tax expenditures, subsidies, deductions, and other credits, it doesn’t make sense to me to provide an additional incentive to do what I think the market will do anyway,” said Sen. John Cornyn, R-Texas, whose no vote particularly stung lobbyists fighting for the bill’s passage.

“They’re 100 percent correct,” Burr conceded when asked if the market was shifting to natural gas regardless of federal incentives. “What the Nat-Gas Act does is accelerate that move.”

Other potential supporters are holding out because their constituents are concerned the bill would reverse the trend toward near record-low natural-gas prices.

“I’m for natural-gas trucks,” Sen. Tom Harkin, D-Iowa, told National Journal last week. That general support aside, Harkin’s office said he voted against the bill because the senator heard concerns from farmers and manufacturers that the bill would raise the cost of natural gas.

Burr, Reid, and Menendez are working to get more support for their bill and work out the technical concerns Pryor and others have. With Reid committed to the bill, chances are good it can make it to the floor again. Burr is also close with House Speaker John Boehner, R-Ohio, who in turn has ties to T. Boone Pickens, the Texas oil billionaire who has been fighting for natural-gas incentives for several years.

This article appears in the March 26, 2012 edition of NJ Daily.

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