Oil Companies demand satisfaction

I mean, they paid for their Congress-critters, fair and partially square. And now these Congress-critters want to take away energy companies money spigot? What?!! Screw the free market, corporate welfare is written into the Constitution, isn't it? Isn't it?!

Oil Companies Attack Legislation Aimed at Tax Incentives : The nation’s oil and gas companies, hoping to fend off an attack by Congress on their tax breaks and subsidies, angrily denounced an effort by House Democratic leaders Friday that would repeal billions of dollars worth of incentives and plow the money into renewable energy projects. ... The giant integrated oil companies, like Chevron and Exxon Mobil, have been more resigned about losing some of their tax breaks but are quietly resisting pressure to renegotiate leases that allow them to pump billions of dollars worth of oil and gas from publicly owned waters without paying royalties to the government.

House Democratic leaders unveiled a bill on Friday that could raise more than $10 billion by repealing half a dozen incentives created in the last several years by the Republican-led Congress or by the Bush administration.

One measure would pressure companies to give up a lucrative loophole that the government inadvertently included in offshore drilling leases for the Gulf of Mexico.

The leases, signed in 1998 and 1999, allow companies drilling in deepwater to escape royalty payments on as much as 87.5 million barrels of oil per lease. Because of an error that officials ignored for six years, the leases omitted a standard escape clause that eliminates the incentives if oil prices climb above $34 a barrel.

Government officials have estimated that the mistake could cost the Treasury $10 billion over the next five years. The Bush administration has asked companies to voluntarily renegotiate, but only five companies have signed new agreements.
The House bill would also repeal several other royalty incentives. It would prohibit “royalty relief” for natural gas produced from very deep wells in shallow waters. It would also repeal similar “relief” for companies drilling off the coast of Alaska.

On the tax front, the House bill would repeal a provision passed in 2004 that entitles oil companies to tax credits for “domestic manufacturing” and a $2 billion tax break for “geological and geophysical” expenses in exploration.

Don't forget how cash strapped the energy consortiums are, especially when compared to the U.S. government which operates at such a surplus every year. Oh wait, its the other way around. Oh well, hey, stem cell research, everybody!

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This page contains a single entry by swanksalot published on January 13, 2007 2:46 PM.

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