Senate vote looms on repeal of oil tax benefits repeal
By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, March 28, 2012 -The Senate spent much of Tuesday wrestling with means to bring energy legislation to the floor, with dozens of amendments offered to modify a bill repealing oil industry tax breaks and using the savings to fund extensions of renewable energy tax credits.
The amendments came furiously enough Tuesday afternoon to prompt Majority Harry Reid, D-Nev., to try and put the bill aside and secure a Senate vote on a postal service reform measure instead, only to have consideration of that measure fall short on a procedural vote. Reid then closed the energy bill to further amendment, setting up a procedural vote on the measure, likely to occur Thursday.
The bill from Sen. Robert Menendez, D-N.J., would raise some $12 billion in deficit reduction over 10 years, with the savings coming from the elimination of oil and gas tax credits, less the money expended to extend a wind energy tax credit set to expire at the end of this year, as well as credits for advanced biofuels, geothermal facilities, biomass facilities and other renewable technologies that must be “in service” before 2014 to qualify. The bill would also restore the 1603 Treasury Department program that provides grants in lieu of production tax credits for biomass and solar facilities, and a $1-per-gallon biodiesel tax credit, both of which expired at the end of 2011.
Members on both sides of the aisle concede the bill, which requires 60 votes for adoption, is unlikely to pass. But most Republicans joined Democrats Monday in voting 92-4 to bring the energy tax bill to the floor. Still, both parties see debate over the bill only as a rhetorical exercise allowing an opportunity to articulate and promote their respective proposals for an energy policy in a politically charged election year.
Meanwhile, a Senate Finance subcommittee Tuesday hearing heard testimony on how recent and pending expirations of energy tax incentives affects deployment of renewable energy facilities, energy efficiency measures and advanced biofuels.
Subcommitte Chairman Jeff Bingamon, D-Ariz., lamented the partisan nature the energy debate has now assumed, noting that a bipartisan vote established the renewable tax credits with a 2005 energy bill passed by a Republican-controlled Congress and a Republican - George W. Bush - in the White House.
He also recalled testimony submitted to the panel in December that attested to the impact of intermittent incentives, including a severe stunting of “the promise of clean energy in the United States.” He also said witnesses then “illustrated how the constant threat of expiration prevents the build-out of a robust manufacturing sector and supply chain ‑ the very pieces that create the majority of jobs in these industries."
Ethan Zindler, the head of policy analysis at Bloomberg New Energy Finance, said 2011 marked the first time since 2008 that the United States finished ahead of China in attracting new clean energy investments, with more than $55 billion in new funds deployed here.
However, “there is little to suggest the [United States] will maintain its leadership position this year or next,” he said. “Last year's surge in private U.S. investment was a direct reaction to policies that were due to expire in 2011 or 2012,” including the 1603 program and the wind energy PTC.
But Benjamin Zycher, a visiting scholar at the American Enterprise Institute, a conservative economics think tank, said that, in spite of federal support and state mandates requiring a certain percentage of electricity come from renewable resources, “renewable power provides only a small proportion of electric power in the [U.S.], and official projections are for slow growth at most.”
He suggested the incentives represent “the imposition of substantial net burdens upon the U.S. economy as a whole, even as the policies bestow important benefits upon particular groups and industries.” Zycher said that as “federal policymakers address the ongoing issues and problems afflicting renewable electricity generation, the realities of this recent history provide a useful guide for policy reform. One such reform should be the abandonment of subsidies for renewable energy.”
Original story printed in March 28, 2012 Agri-Pulse Newsletter.
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