By Andrew Restuccia - 03/26/12 02:35 PM EDT
The oil industry launched a full-court press Monday in opposition to Democrat-backed legislation that would repeal billions in tax breaks for the largest oil companies.
The American Petroleum Institute (API), the powerful oil industry trade group, is running an eight-state radio and print advertising campaign opposing efforts to eliminate the tax breaks.
“It’s a bad idea, a destructive idea, and we urge all senators to oppose it,” Stephen Comstock, API’s tax policy manager, said.
“We see this really about politics, rather than policy.”
Comstock argued that the legislation, authored by Sen. Robert MenendezRobert MenendezTim Kaine backs call to boost funding for Israeli missile defense GMO labeling bill advances in the Senate over Dem objections Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal MORE (D-N.J.), would make U.S. oil companies less competitive, put jobs at risk and potentially increase gas prices.
“The oil and natural-gas industry paid its fair share and more,” he said.
The Menendez bill eliminates a slew of oil-industry tax deductions for major integrated oil companies, using the savings to finance the extension of key renewable energy tax credits.
The legislation faces major hurdles to passage, but will nonetheless rally President Obama and many Senate Democrats, who have made killing the tax breaks a top political priority amid soaring gas prices. The Senate is expected to move forward with a procedural vote on the measure Monday night.
On Monday’s conference call, Comstock touted the industry’s new advertising campaign, which calls for expanded domestic production and claims that killing the industry’s tax breaks could lead to higher gas prices. The ads will run in Missouri, Massachusetts, West Virginia, Virginia, North Carolina, Maine, Nevada and the District of Columbia through Tuesday.
Republican and industry opponents of the bill have highlighted a March 2011 Congressional Research Service report that says a wide-ranging repeal of oil industry tax breaks could raise oil prices “on what would likely be a small scale.”
But a separate May 2011 Congressional Research Service report that analyzed legislation similar to the Menendez bill found that the repeal of five key oil industry tax breaks would have little to no impact on gasoline prices.
Backers of the bill say the oil industry’s claims are overblown and insist that major oil companies, which have seen soaring profits in recent years, will not be overly burdened by the tax break repeal.
"We can end wasteful taxpayer subsidies to Big Oil and use these savings to invest in clean energy and create jobs and reduce the deficit," Menendez told reporters Monday.