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Democrats want to shift oil tax
Plan would cut oil incentives, boost federal royalties, give to green energy

Steven Mufson, Washington Post via MSNBC
House Democrats are crafting an energy package that would roll back billions of dollars worth of oil drilling incentives, raise billions more by boosting federal royalties paid by oil and gas companies for offshore production, and plow the money into new tax breaks for renewable energy sources, congressional sources said yesterday.

Eager to paint themselves as different from the Bush administration and the past Republican majority, Democratic leaders are targeting a manufacturing tax cut in 2004 that they say gave unneeded incentives to the oil industry, Majority Leader Steny H. Hoyer of Maryland said in a briefing yesterday. Hoyer said Democrats are also planning to force oil companies to pay royalties on deepwater Gulf of Mexico tracts leased in 1998 and 1999; the Interior Department has said that the leases inadvertently failed to include provisions for royalty payments once oil prices rose above certain thresholds.
(4 Jan 2007)

Oil Group Blasts US Democrats’ Tax Agenda

Rob Wells and Maya Jackson Randall, Dow Jones
U.S. House Democrats’ plan to snatch back billions of dollars worth of tax incentives from Big Oil will reduce domestic production and make the nation more dependent on foreign oil, industry officials say.

The oil industry has been put on the defensive as Democrats plow forward with a plan to swiftly approve an energy bill that would repeal significant oil subsidies and set up a reserve fund for renewable energy. Senate Majority Leader Harry Reid of Nevada said Democrats’ focus on solar, geothermal and other renewable energy would reduce U.S. dependence on foreign oil.

Democrats also want to force oil companies that have been avoiding paying royalties to the federal government to pay up. For example, Rep. Edward Markey, D-Mass., has touted a plan that would bar energy companies from bidding on future drilling contracts in the Gulf of Mexico without first renegotiating flawed 1998 and 1999 leases. Those leases allow oil companies to forgo paying royalties to the federal government.

But, according to oil lobbying group American Petroleum Institute, that proposal would put U.S. oil firms at a disadvantage compared to foreign-based oil companies. It “outsources the Gulf of Mexico to foreign companies,” API Chief Economist John Felmy said Thursday.
(4 Jan 2007)

An interview with California environmental adviser Terry Tamminen

David Roberts, Grist
Terry Tamminen is a compact, affable man. With his bluntness and lack of pretense, it’s easy to see why Arnold Schwarzenegger trusted him. The California governor brought Tamminen on as his environmental adviser in 2003, elevated him to secretary of the state EPA, and then appointed him a senior cabinet adviser in 2004. In part due to Tamminen’s behind-the-scenes influence and tireless work, Schwarzenegger’s first term saw the state pass numerous groundbreaking environmental laws.
(4 Jan 2007)

Alternative-Energy Spending Fizzles Out for U.S.

Kevin Bullis, MIT Technology Review
Congress ends without funding research programs, as the United States falls behind in alternative technologies.
Despite the hype and numerous promises that began 2006, including President Bush’s declared plans to curb the United States’ addiction to oil, the 109th Congress ended the year without allocating funding for proposed increases in research spending for alternative energy.

Although Bush proposed a fiscal-year 2007 budget that would have increased funding for some renewable-energy resources, including solar and biomass, as well as for research into hydrogen fuel-cell vehicles, the budget was not passed. Instead, Congress passed a stop-gap continuing resolution that will keep the budget at 2006 levels, which, because of inflation, amounts to a cut in funding, and it specifically decreases funding in some cases. For now, the Department of Energy is suspending funding for new projects, a spokesperson says. According to Kei Koizumi, director of the R&D Budget and Policy Program at the American Association for the Advancement of Science, other research agencies are cutting funding for ongoing projects by 20 percent because of budget uncertainty. This makes it difficult for labs to hire the researchers or buy the equipment necessary to continue work.

…Some experts are warning that the cuts come just as much more money is needed to address energy-security concerns such as unstable oil prices and global warming.
(4 Jan 2007)