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OVERNIGHT ENERGY: Oil tax breaks safe as supercommittee flops
State of play: The collapse of the deficit supercommittee means oil companies fighting to preserve billions of dollars in tax breaks can once again breathe easy.
Many Democrats had sought to kill the tax subsidies as part of any major deal on spending cuts and revenues, prompting strong oil industry pushback.
While scuttling the subsidies was likely a long shot for inclusion even if the panel had produced a deal, its failure probably ends any remaining threats this year.
The tax incentives’ survival shows the industry’s lobbying clout even during a year that saw near-record energy prices, high profits and plenty of calls — including some from Republicans — to look at energy subsidies overall.
The oil industry has waged a vigorous lobbying and advertising campaign to keep incentives such as the ability to claim lucrative deductions on domestic manufacturing income.
The American Petroleum Institute, a major trade group, and other industry advocates argued that removing tax incentives would raise energy prices and cost jobs, while critics say the incentives are unneeded gifts to a profitable, mature industry.
While the panel’s demise takes the tax breaks off the table, it also deprives drilling advocates of an avenue to push for wider oil-and-gas leasing.
NEWS BITES:
Report: China may retaliate over Solar trade case
The New York Times reported Monday that Chinese solar panel manufacturers don’t expect to come out on top in an investigation into whether the country is subsidizing its solar industry and flooding the U.S. market with underpriced panels.
While Chinese companies are already making changes to the way they produce their panels, the Times said that China is mulling a plan to retaliate against the United States for the case, which could impose tariffs on Chinese solar panels.
Here’s the Times: “Chinese solar panel manufacturers are preparing to shift steps in their production processes to South Korea, Taiwan and the United States in response to the filing of a trade case against them in Washington, and are working on a way to retaliate against U.S. exports to China, Chinese solar industry executives and officials said Monday.”
U.S. solar manufacturer SolarWorld Industries America and other companies filed a petition with the Commerce Department and the International Trade Commission alleging last month alleging unfair trade practices.
The Commerce Department said in early November it would investigate the allegations.
The U.S. solar industry is divided over the case, with several companies raising concerns that the effort will hurt some solar companies by raising the cost of panels.
GOP Budget Chairman Ryan backs energy tax repeal plan
As noted above, the supercommittee’s collapse blocks one Democratic effort to nix oil-and-gas industry tax breaks.
But a broader push to repeal renewable and some fossil energy tax breaks alike has picked up a heavyweight sponsor in House Budget Committee Chairman Paul Ryan (R-Wis.).
On Friday Ryan added his name to Rep. Mike Pompeo’s (R-Kan.) bill that ends credits for biofuels, renewable power production, carbon sequestration, plug-in electric vehicles and a suite of other incentives – including a pair of oil-industry tax breaks.
Under Pompeo’s plan, the new revenues would offset by an equal reduction in the corporate tax rate.
The bill has backing from conservative groups including Heritage Action for America, Americans for Prosperity, Americans for Tax Reform and others.
Markey: Oil industry 'cooking numbers' to push drilling
Rep. Edward Markey (Mass.), the top Democrat on the House Natural Resources Committee, is challenging oil industry claims that 1 million jobs could be created in the oil-and-gas sector in the coming years.
Markey took aim at an advertising campaign by the American Petroleum Institute, the oil industry’s powerful trade group, that says the sector stands to create 1 million jobs by 2018 if policymakers expand onshore and offshore drilling. The figure comes from two studies commissioned by API, Markey said.
“[T]he job figures appear to be sharply at odds with the official jobs statistics compiled by the authoritative Bureau of Labor Statistics, an independent statistical agency charged with measuring U.S. labor market activity, and the Congressional Budget Office has found the administration’s plan to eliminate oil-and-gas tax subsidies would add, not subtract, $41 billion in federal revenue over the next 10 years,” Markey said in a letter to API President Jack Gerard Monday.
Markey pressed API to answer a series of questions about the study by Dec. 1.
“It appears the oil lobby got what they paid for: cooked numbers to justify their untenable policy positions,” Markey said in a statement.
The oil industry has long argued that expanded offshore oil-and-gas drilling will boost the economy and create jobs — two contentions that liberal Democrats and environmental groups reject.
IN CASE YOU MISSED IT...
Here's a quick roundup of Monday's E2 stories:
— Obama targets Iran's energy sector with new sanctions
— EPA delays rollout of refinery greenhouse gas rule
— Beacon to sell New York plant to repay Energy Department loan
— Conservatives use Solyndra to bash Harry Reid's natural-gas bill
— UN reports record greenhouse gas levels
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