Senate to take up bill on ending tax breaks for oil firms next week

The Senate will take up a controversial bill next week that would end billions of dollars in tax breaks for large oil producers and increase breaks for clean-energy producers, aides close to Democratic leadership told The Hill on Thursday.

Sen. Max Baucus (D-Mont.), the author of the bill and chairman of the Senate Finance Committee, said the measure will help address high gas prices, which are now averaging almost $4-per-gallon nationwide, and are well above that level in many areas. 

“High gas and energy prices are hitting folks hard in Montana and across the country,” Baucus said in a statement. “Now is not the time to stand idly by while large oil and gas companies get billions of dollars in tax breaks — now is the time to take concrete steps toward cleaner, more affordable, domestically produced energy.” 

Not everyone agrees Baucus’s bill would have that effect.

Brian Darling, the senior fellow for government studies at the conservative think tank the Heritage Foundation, said on Thursday that taking away billions of dollars in tax cuts from energy producers would actually have the opposite effect, because oil producers would cover their losses by charging more for their product. 

"This bill would actually increase energy prices," Darling said, adding that the bill has little chance of clearing the Senate. "It may be a good idea to look at some of the tax breaks in the context of tax reform — but in terms of lowering energy costs, it just doesn't make sense."