House Oil Bill Called 'First Step' in Energy Policy Shifts

By Nathan Burchfiel | July 7, 2008 | 8:32pm EDT

( - Activists from more than a dozen environmental groups gathered on Capitol Hill Tuesday to lobby for the Clean Energy Act, the final part of House Speaker Nancy Pelosi's (D-Calif.) "100-hour" agenda that the activists are calling a "first step" in restructuring the government's energy policy.

The bill would roll back some tax loopholes and subsidies for oil companies and use the increased federal revenue to invest in renewable energy research. Supporters of the measure estimate it will bring in $14 billion over the next 10 years.

The House is scheduled to vote on the bill Thursday. It is the last of six major legislative issues targeted by the new Democratic majority. Others include increasing the minimum wage, allowing federal funding of stem cell research and cutting interest rates on student loans.

"While the oil companies experience record profits, the federal government has been giving them a free ride," Jeff Rickert, vice president of the Apollo Alliance, charged during a news conference Tuesday.

"The Clean Act will fix that," he pledged. "It will set the record straight on old debts and ... create a chance for oil companies to become contributors to building a new American energy system."

In addition to rolling back some subsidies for oil companies, the bill will close loopholes created during the Clinton administration that allow oil companies to avoid paying royalties for their use of public land.

"We need a program that matches the scale of the problem to create a solution," Rickert said. "The Clean Act is a good first step, but this is going to be a long march. Passage of this bill is a signal of change and a sign that Congress is ready to meet that challenge."

Other activists echoed the theme. Debbie Sease, national campaign director for the Sierra Club, called the bill a "huge step in the right direction."

Gene Karpinski, president of the League of Conservation Voters, said the measure was "an important first step." Karpinski also declared that "the biggest problem we face in the environment is global warming."

Anna Aurilio, legislative director for the U.S. Public Interest Research Group (PIRG), said environmental groups are hopeful the new Democratic majority will address "a broad array of policies that have been ignored for years that could help create jobs, save money and reduce global warming pollution as well as really move us toward a new energy future."

Among the environmentalists' goals are increasing fuel economy standards, shifting to and setting standards for renewable fuels, reducing energy consumption and shifting billions of dollars into clean energy technologies, according to Aurilio.

"We think there's a huge opportunity in the 110th Congress to move forward on a whole menu of clean energy technologies, clean energy policies that we really need to move forward on," she said.

Opponents of the bill worry that it will hurt consumers by discouraging energy companies from producing domestically and driving up costs.

"It would raise taxes on oil companies that engage in domestic drilling which means they'll have less after-tax revenue to reinvest in those projects," said Ben Lieberman, an energy policy analyst for the conservative Heritage Foundation. "It'll also mean that those projects are less economically attractive."

Lieberman told Cybercast News Service that "there's nothing in [the bill] that's going to reduce the price at the pump, and in fact, some provisions that may actually increase the price at the pump over the longer term."

Lieberman was also skeptical that the government's investment in alternative energy would produce results. "The 30-year track record for federal alternative energy programs is not very good. Usually the money gets wasted by Washington so there's no reason to be optimistic that this money ... is going to lead to anything useful," he said.

Lieberman said that while the bill may easily pass the House on Thursday, it will have a "tougher time in the Senate, because it's closer, and for that reason, even some Democrats might want to take a second look at it, particularly Democrats from oil states like Louisiana, Texas and Oklahoma."

Lieberman said he would expect President Bush to veto an attempt to raise taxes on the oil industry but that the president's rarely used veto pen is "one of the big wildcards now."

Bush has previously opposed taxing oil companies' profits, instead urging the companies - not the government - to invest in new forms of energy.

But according to analysis conducted by Democratic pollster Stan Greenberg for the League of Conservation Voters, Americans want the government - not the energy companies - to lead the way on researching new sources of energy.

Greenberg's post-election analysis found that 66 percent of Americans "support government taking the lead in promoting alternative energy rather than allowing businesses to make major energy investment decisions."

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