Clinton Seeks 'Energy Revolution' Fueled by Tax on Oil Profits

By Randy Hall | July 7, 2008 | 8:31 PM EDT

( - Sen. Hillary Clinton (D-N.Y.) Tuesday called for an "energy revolution" based on greater fuel efficiency and a $50 billion research fund financed largely through higher taxes on oil company profits. A GOP spokesman responded that the plan is just "partisanship, political pandering and yesterday's mistakes."

"Americans today are once again feeling the effect of runaway oil prices and the failure of our energy policies," Clinton said during a speech at the National Press Club in Washington, D.C. Solving the complex situation "will take a well-funded, comprehensive approach with staying power," she added.

Clinton summed up her recommendations in two words: innovation and efficiency.

Regarding the first area, the senator noted that "technology is finally bringing down the prices and making innovations closer to commercial application every day," but "we can't just wait for innovation."

To speed the process along, Clinton said she would introduce legislation to create a $50 billion strategic energy fund that would "allow government and business to work together to help solve some of the toughest scientific challenges that we have to deal with when it comes to energy and climate.

"We'll never find the equivalent of stealth technology for energy if we don't look for it," she stated. With that in mind, the senator called for $9 billion to be diverted over the next five years from the fund to encourage "creative, competitive projects" from young inventors "that can help us move more quickly on the path to energy independence."

Claiming that "businesses have to be part of the solution, not the problem," the New York lawmaker called for "a commitment from our oil companies to reinvest their unanticipated profits into our shared energy future."

Clinton added that oil companies are making huge profits "not because they planned on it, not because of great managerial expertise, but because of escalating world demand and, therefore, increasing prices for their commodity that they didn't create in the first place."

"I think it's time that we made sure they put a fair share of their profits toward a sound energy future," she stated.

"We need to reform our energy taxes so that large oil companies that reap huge benefits from unexpectedly high energy prices over the next two years will be required to pay a portion of their profits into the strategic energy fund," the senator said.

However, if oil companies "began making investments in biofuels, in other forms of renewable energy, in new, cleaner refining capacity" on their own, Clinton proposed, "then they wouldn't have to pay into the fund.

"And we ought to repeal the tax breaks that even the oil companies have told us they don't need, and put that money into the fund as well," she said. "With prices, profits and these tax breaks in the fund, you could raise about $50 billion, more than enough to begin the energy revolution that we need."

Turning her attention to efficiency, the senator proposed "a concrete goal of reducing our dependence on foreign oil by at least 50 percent by 2025. That would be a reduction in oil consumption of just under 8 million barrels a day."

The government needs to "do more to set the standards for energy efficiency and let businesses and homes and others know more about what each of us can do, and provide some technical assistance and support," she said.

Other methods of increasing energy efficiency Clinton recommended included a greater reliance on renewable energy sources such as wind and solar energy, mass transit, hybrid automobiles and creating a 90-day strategic petroleum reserve of gasoline, heating oil, jet fuel and other refined products.

"When energy prices are rising faster than incomes, every family feels the consequences, but our most vulnerable families feel them the worst," Clinton said. "Almost one in three low-income families have skipped medical or dental care, and almost one in four have missed a rent or mortgage payment because of energy expenses.

"Our values," she said, "demand that we be good stewards of the planet for our children and our children's children. We are failing that simple moral test if we continue to stand by as the Earth warms faster than at any time in the past 200,000 years."

Tracey Schmitt, press secretary for the Republican National Committee (RNC), was not impressed with the New York lawmaker's proposals. Schmitt said Clinton has not supported legislative efforts to utilize other sources of domestic oil.

"Senator Clinton's energy policy consists of a unique balancing act involving partisanship, political pandering and yesterday's mistakes," Schmitt said.

"Voting against meaningful legislation that would increase domestic production while opposing a comprehensive energy bill is harmful enough, but adopting the energy policies of the 1970s is a price Americans cannot afford," she added.

Schmitt also noted that Clinton's speech on energy occurred the same day the RNC unveiled a new Internet ad entitled "Democrats Pump up the Price." The ad is accompanied by a "gas calculator" that allows viewers "to determine how much they would pay if Democrats had their way with oil prices."

During Tuesday's event, Clinton denied that she had made any decisions about running for president in 2008, although many experts anticipate her candidacy. However, an unexpected incident demonstrated that the New York senator has a unique place on the national stage.

As she approached the end of her speech, Clinton was interrupted by two women from the audience. The members of the anti-war group Code Pink chanted "Stop fueling the war" until they were escorted from the room.

See Earlier Stories:
Clinton Losing Hollywood to Gore for 2008, Analysts Say (May 22, 2006)
Oil Companies at War With Consumers, Group Charges (May 04, 2006)
Hillary Clinton 'Already Focused' on 2008, Analysts Say (Oct. 24, 2005)

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