House OKs 26 cent/barrel tax increase for Oil Spill Trust Fund

Before adjourning for Memorial Day, the House of Representatives narrowly passed a tax-extender package that includes an oil tax increase of 26 cents a barrel.

The bill increases a tax on the oil industry to 34 cents a barrel from 8 cents a barrel. This money would go into the Oil Spill Liability Trust Fund.

The fund helps cover economic and natural resource costs above the $75 million liability cap for private companies. The bill also raises the per-incident cap for payments from the Trust Fund to $5B from the current $1B.

The bill extends for one year (retroactive to Jan. 1) energy tax credits for biodiesel, renewable diesel, energy efficiency and alternative vehicles fuel.

It also extends the “doc fix,” which each year prevents drastic cuts in Medicare payments to doctors and hospitals.

A second bill passed that authorizes the Defense Department to spend $470M on energy efficiency, renewable energy and environmental cleanup. This is the bill that includes an amendment repealing “don’t ask, don’t tell.”

This bill provides $5M for a pilot project to develop a microgrid. Another provision says DOD can stop contracts with BP if it is not considered a “responsible source.”

It allows government agencies to buy alternative fuels whose lifecycle greenhouse gas emissions exceed conventional fuel (i.e. tar sands) so long as less than half of that fuel comes from such sources.

Both measures will move to the Senate after the break. Their future there is uncertain.

(Source E&E News PM)

House Dems back down on offshore drilling

(Photo of drilling platform off Santa Barbara that caused big spill in 1969 from Flickr and photographer Doc Searls)

Washington Report: Facing the threat that the ban on offshore drilling will be allowed to expire Sept. 30, House Democrats are expanding the drilling provision in their new energy package to include drilling 100 miles offshore and as close as 50 miles off the east and west coasts if states want it. Their ace in the hole is that they haven’t included royalties for the states, which makes it less likely states will opt in. The plan maintains a ban within 125 miles of Florida’s gulf coast until 2022. Also, in an effort to bring coal-state reps onboard, the plan now would spend $10 billion over 10 years on carbon capture and storage technology. A third new item is more vehicles using natural gas as fuel. The package also includes:
• A renewable electricity standard (RES) of 15% by 2020, one-fourth of which can be met with efficiency
• Extension of tax credits for renewable energy and efficiency
• Pressure on oil companies to drill where they have existing leases, such as Alaska
• Repeal of Big Oil tax breaks and royalty subsidies
• Release of oil from the Strategic Petroleum Reserve
• More money for public transit

The package is expected to go to the Rules Committee Monday and be voted on as early as Tuesday. The GOP has its own bill – The American Energy Bill – which calls for much wider offshore drilling, drilling in ANWR, and more use of oil shale and nuclear plants, as well as expanded renewables and efficiency.

In the Senate, the “Gang of 10” bill picked up 4 more sponsors this week: Susan Collins (R-Me.), Amy Kobluchar (D-Minn.), Elizabeth Dole (R-N.C.) and Evan Bayh (D-Ind.), doubling the original 10. That bill is also expected to come up next week, along with two alternatives. Senate Majority Leader Harry Reid (D-Nev.) said he'd like to vote first on the tax credit extensions before bringing up broader bills. For more on the “Gang of 10” and background on the House bill, see EarthlingAngst’s Sept. 5 post. There is an urgency to pass something before the end of the month, when the offshore moratorium expires, allowing drilling within 3 miles of shore. With elections at hand and public sentiment buying the argument that drilling is the answer, it’s clear that science is not winning out this time. (Source: E&E Daily)


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