Rep. Tim Bishop, D-N.Y., has introduced an energy bill that would eliminate some of the tax breaks enjoyed by the major oil producers.
The bill, which Bishop introduced Thursday, contains some provisions of a bill that he introduced earlier in the week. Bishop is lead sponsor of the Taxpayer and Gas Price Relief Act (H.R. 1748), a comprehensive energy bill containing the provisions of Bishop's Big Oil Welfare Repeal Act (H.R. 1689), and ending some other taxpayer funded giveaways to the oil industry. Bishop estimated that the latest bill would reduce the deficit by nearly $31 billion over 10 years. President Obama has called on Congress to repeal tax breaks for the major oil companies.
“Right now, Big Oil has its hand in the consumer's left pocket every day they fill up, and their right pocket on tax day,” Bishop said in a statement. “Repealing the subsidies will not affect prices at the pump, but it will end the outrageous practice of giving nearly 3 billion taxpayer dollars a year to wildly profitable corporations. Make no mistake, these billion-dollar giveaways to Big Oil do nothing, repeat nothing, to lower oil prices.”
Oil is traded on a global market and each barrel of crude is sold for the same price, regardless of how much its production was subsidized, Bishop’s office noted. Producers receiving tax subsidies pass on that benefit to their shareholders, not to consumers. A recent report showed that last year, the largest oil companies spent 60 percent of their profits on dividends and stock repurchases, and just 18 percent on exploration.
Republicans defeated a motion to bring Bishop’s earlier bill, the Big Oil Welfare Repeal Act, to the House floor, and instead plan to pass legislation focused exclusively on drilling new offshore wells.
“It's ‘Drill Baby Drill’ deja vu on the House floor, and focusing exclusively on drilling will just get us into a bigger energy hole,” said Bishop. “The fact that oil went down approximately 10 percent on Thursday demonstrates that the fundamentals of the oil market are broken. We need a comprehensive approach, otherwise, we’ll constantly have repeating cycles of price spikes and dips.”
To help consumers in the short-term, H.R. 1748 expands the President’s authority to release oil from the Strategic Petroleum Reserve to fight back against market manipulation and speculation. Bishop's bill calls for a temporary release of 30 million barrels of crude (about 5 percent of the total reserve) from the SPR to bring down oil prices in the short term. Releasing oil from the SPR has a proven record of reducing prices, including a 33 percent drop when President George H.W. Bush tapped the reserve during the Gulf War, Bishop noted.
In addition, a royalty reform provision in the legislation would make oil companies pay more for the oil they have extracted from public lands. Loopholes in current law allow drilling without any royalties in certain areas, and could cost American taxpayers up to $53 billion over the next 25 years. The legislation would also empower the Federal Trade Commission (and state attorneys general to institute civil and criminal penalties for fuel price gouging.
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