Democrats Hope to Take From Oil, Give To Green Energy

The repeal of the 2004 tax cuts for the oil and gas industry would generate nearly $5 billion based on estimates by the Joint Committee on Taxation. The royalty payments would yield between $9 billion and $11 billion.

Published: 04-Jan-2007

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.

The repeal of the 2004 tax cuts for the oil and gas industry would generate nearly $5 billion, Democratic lawmakers said, quoting estimates by the Joint Committee on Taxation. The royalty payments would yield between $9 billion and $11 billion, Hoyer said.

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