There is speculation that Chairman of the Senate Finance Committee Max Baucus (D-MT) is working to develop an energy tax package that will NOT include offsets targeting the oil and gas industry.
On February 27, the House passed H.R. 5351, the Renewable Energy and Energy Conservation Tax Act of 2008, which includes $17.6 billion in renewable energy and energy conservation tax incentives, a number of which NEPPA actively supports. In order to keep their campaign pledge, the House Democrats have "paid for" the bill by eliminating tax incentives currently available to the oil and gas industries. Support for the production and conservation tax incentives is broad and bi-partisan, but the White House, many House and Senate Republicans, as well as moderate Democrats from mostly oil and gas producing states, adamantly oppose the offsets, making passage in the Senate tenuous.
Baucus's signaling of a change in strategy on the Senate increases the likelihood of a stand-alone energy incentive package's making it through both chambers and to the White House, but the task is still difficult. Senate Minority Leader, Mitch McConnell (R-KY) and Treasury Secretary Paulson have resisted numerous attempts to engage on an acceptable package of offsets, consistently expressing support for renewable incentives, but reiterating opposition to the oil and gas "tax increases."
Baucus's strategy is to try to secure the support of oil and gas Democrats such as Sen. Mary Landrieu (D-LA), as well as moderate Republicans such as Sen. Pete Domenici (R-NM), ranking member on the Senate Energy and Natural Resources Committee. Whether this strategy will be successful remains to be seen.