On January 12, House Resources Committee Chairman Nick Rahall (D-WV), unveiled legislation on behalf of House Democrats that will roll back oil industry tax breaks and recoup royalties from deep water Gulf of Mexico producers. The bill garnered the support of 196 Democrats and is expected to be "fast tracked" through the House. Senate action, however, is expected to be much slower.
The bill, H.R. 6, would steer new revenues into alternative energy development through a new reserve fund. The bill would raise an estimated $13 billion in new revenues, leadership aides said. The bill also repeals several royalty relief provisions from EPAct 2005, including incentives and royalty relief for producing "deep gas" in gulf waters. Other language would strip royalty relief for areas in offshore Alaska and in the National Petroleum Reserve, end the oil industry's eligibility for a 2004 tax break on income from domestic manufacturing and change a tax break allowing accelerated amortization of certain oil exploration costs.
The bill creates a new "Strategic Energy Efficiency and Renewables Reserve." It does not specifically say how the money is to be spent. Instead, it says the money in the reserve will offset the cost of subsequent legislation to speed up the use of renewable energy, alternative fuels, energy efficient products and conservation.