E2-Wire

OVERNIGHT ENERGY: Senate Dems ready oil tax bills amid divisions

by Ben Geman and Andrew Restuccia - 05/10/11 12:05 AM ET

State of Play: Senate Democratic leaders are ramping up efforts on multiple fronts this week to push for the repeal of billions of dollars worth of tax incentives for major oil companies.

But the messaging push comes amid competing views about whether the savings should be used for deficit reduction or to fund alternative energy and efficient-vehicle incentives.

Tuesday morning a group that includes several Senate Democrats facing tough reelection battles will unveil a bill to “end to taxpayer handouts to the 5 largest oil companies making record profits and use the savings to reduce the deficit,” according to an advisory from Democratic leadership.

Democratic leaders want to launch a floor battle on industry subsidies as soon as this week, although Majority Leader Harry Reid’s (D-Nev.) office did not respond to requests for comment Monday evening.

Sen. Patty Murray (D-Wash.), a member of the Democratic leadership, said Reid would address the oil-tax issue Tuesday but declined to provide any details.

The group unveiling the bill includes Sens. Sherrod Brown (D-Ohio) and Claire McCaskill (D-Mo.), and Brown said Sen. Jon Tester (D-Mont.) is also part of the effort. All three are politically vulnerable next year.

Sen. Robert Menendez (D-N.J.) will also join in unveiling the bill, which Democrats are using as a weapon against Republicans in battles over fiscal policy.

Brown told reporters that the plan will “Call the Republicans’ bluff — do they really care about deficit reduction?”

But Senate Finance Committee Chairman Max Baucus (D-Mont.) has floated a plan that would steer the savings from repeal of the tax breaks into alternative fuels and vehicle incentives – not deficit reduction.

Baucus appears to be moving forward on a slower track. He is holding a Thursday hearing on industry tax breaks.

“We will have legislation soon. Like all things, it’s ready when it’s ready,” Baucus told reporters in the Capitol Monday evening. “There are a lot of factors, there are a lot of senators with different points of view.”

Asked about using the savings from tax break repeals to help battle the deficit, rather than his alternative-energy plan, he replied, “That’s one of things we’ve got to work out, what makes the most sense.”

Sen. Bill Nelson (D-Fla.), a member of the powerful Finance panel, said Monday that using increased revenues for deficit reduction rather than green technologies is more politically viable.

“Structurally, Baucus is correct – it ought to go to alternative energy. But you can’t get that through the House of Representatives,” Nelson said in the Capitol. “I’m interested in solutions. I want to get something done.”

Worrying about what’s viable in the House, however, would be a luxury for Democrats who face huge hurdles moving legislation on oil industry tax policy through the upper chamber. Recent efforts have fallen well short.

Sen. John Thune (R-S.D.), a member of the GOP leadership, attacked the prospect of legislation that strips incentives for the major companies and uses the money to attack the deficit.

The oil industry, most Republicans and some oil-state Democrats say that repealing incentives would raise costs and slow domestic energy development.

“I think it is going to be awfully hard to make it more expensive for people in this country to buy energy, and raising taxes right now on the companies that produce the energy is probably just going to make energy prices go up even higher,” Thune said in the Capitol.

NEWS BITES:

Hastings in hospital, will miss votes on GOP drilling bills

House Natural Resources Committee Chairman Doc Hastings (R-Wash.) is undergoing treatment at a Washington state hospital for a digestive disease called diverticulitis and will not be on Capitol Hill this week, his office said Monday evening.

In his absence, Rep. Doug Lambord (R-Colo.) and other Republicans on the Natural Resources Committee will manage floor debate on two Republican offshore drilling bills this week.

The first bill would require that the Interior Department act on pending permit requests within 30 days. The bill includes two 15-day extensions, but a permit would be deemed approved if the department has not acted within 60 days.

The second bill would require the Interior Department to sell offshore drilling leases in areas off the Atlantic and Pacific coasts beginning in 2012. It would also expand leasing off the coast of Alaska.

The House is expected to vote on both bills Wednesday, a spokesman for House Majority Leader Eric Cantor (R-Va.) said Monday night.

Some more on diverticulitis, via PubMed Health:

“Diverticulitis is small, bulging sacs or pouches of the inner lining of the intestine (diverticulosis) that become inflamed or infected. Most often, these pouches are in the large intestine (colon).”

House Republicans probe effect of EPA rules on electricity prices

Top Republicans on the House Energy and Commerce Committee are petitioning the Environmental Protection Agency for information about the effect of agency regulations on the price of electricity.

“[W]e write today specifically to request information to help evaluate EPA’s analysis and planning concerning the specific impact of its new rules on the U.S. power sector and the reliability of the domestic energy supply necessary to power a recovering economy,” a Monday letter from the Republicans says.

The lawmakers also sent letters to officials at the Energy Department and The Federal Energy Regulatory Commission aimed at determining the extent to which EPA coordinated its regulatory efforts with the agencies.

The letter was sent by full committee Chairman Fred Upton (R-Mich.), Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Fla.).

Study links gas ‘fracking’ to methane in water supplies

A new study by Duke University scientists shows “systematic” evidence that methane at gas wells developed with the controversial technique called hydraulic fracturing – or “fracking” – is contaminating drinking water aquifers in Pennsylvania and New York.

“Our results show evidence for methane contamination of shallow drinking-water systems in at least three areas of the region and suggest important environmental risks accompanying shale-gas exploration worldwide,” states the study published in the Proceedings of the National Academy of Sciences.

It notes that dissolved gas in enclosed spaces can be an asphyxiant as well as an explosion and fire hazard.

However, the researchers did not find evidence that chemicals used in the fracking process are contaminating drinking water. “We conclude that greater stewardship, data, and — possibly — regulation are needed to ensure the sustainable future of shale-gas extraction and to improve public confidence in its use,” the study states.

Murkowski steers clear of Bingaman drilling-safety bill – for now

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) will roll out offshore drilling safety legislation Tuesday, but don’t look for Sen. Lisa Murkowski (R-Alaska) – the panel’s top Republican – to sign on yet.

The panel unanimously approved a bill last year in response to the BP oil spill, but it sputtered and died after the committee acted.

This time around, Murkowski said, the two leaders have not reached a deal. But she downplayed the idea of a rift on the issue between the committee leaders. “What we were trying to do was figure out if we could come to terms on all of the safety things and we got hung up on one issue,” Murkowski said in the Capitol Monday.

She said that in order to “advance it and just get something out there so that we could take it up in committee,” she and Bingaman agreed that he would float the plan alone. “What I think both of us hope for is a very open committee process,” Murkowski said.

NOAA: April “month of historic climate extremes”

Here is National Oceanic and Atmospheric Administration’s take on April’s extreme weather, which included deadly tornadoes and wildfires.

“Historic flooding, a record-breaking tornado outbreak and devastating wildfire activity made April 2011 a month of historic climate extremes across much of the United States, according to scientists at NOAA’s National Climatic Data Center (NCDC) in Asheville, N.C.”

“The average U.S. temperature in April was 52.9 degrees F, which is 0.9 degrees F above the long-term (1901-2000) average. April precipitation was 0.7 inches above the long-term average, the 10th wettest April on record.”

NOAA’s assessment comes amid much discussion about the role climate change played in the tornadoes, which killed hundreds of people in several Southern states.

Boehner talks gas prices and the U.S. dollar

House Speaker John Boehner (R-Ohio) planned to link gas prices with the weak U.S. dollar during a speech Monday night at the Economic Club of New York.

Here’s an excerpt of his prepared remarks, provided by Boehner’s office before the speech:

We’ve also seen the arrogance of government recently in the skyrocketing gas prices our citizens and businesses are dealing with.

There’s a clear connection between high gas prices and the weak dollar that some in Washington have quietly welcomed over the past couple of years.

It’s well known that when you print tons of money, the dollar sinks, and the price of food and energy rises — significantly. Yet the American people are told there is nothing that can be done about it. This is simply untrue.

Washington has also kept most of our nation’s vast energy resources under lock and key for decades, over the clear objections of the American people — the people who own those resources.

If we had listened to the people decades ago — or even a few years ago — many of these resources would be available to us right now to lower the price of energy. And we would probably have about a million private-sector jobs in America that we don’t currently have.

Instead what Washington has done is raise the specter of higher taxes, creating more uncertainty for those in America who create jobs.

Gas price update

According to AAA, the current average price for a gallon of gas in the United States is $3.96. That’s down slightly from Sunday’s average of $3.97.

ON TAP TUESDAY:

McConnell, Japanese ambassador headline nuke energy summit

The Nuclear Energy Institute’s big annual conference features speakers including Senate Minority Leader Mitch McConnell (R-Ky.) and Ichiro Fujisaki, who is Japan’s ambassador to the U.S.

Senate panel probes drilling technologies

The Senate Energy and Natural Resources Committee will hear from a range of experts on new developments in oil-and-gas drilling technologies.

Green building summit gets blue-chip speakers

The U.S. Green Building Council opens a two-day conference Tuesday with speakers including Council on Environmental Quality Chairwoman Nancy Sutley and Navy Secretary Ray Mabus.

IN CASE YOU MISSED IT…

Here’s a quick roundup of Monday’s E2 stories:

– House Oversight Committee Chairman Darrell Issa (R-Calif.) ramped up his probe of the Obama administration’s decision to abandon Yucca Mountain.
– Sen. Sherrod Brown (D-Ohio) floated a proposal to slash oil industry tax breaks.
– The oil industry ramped up its opposition to cutting the tax breaks.
– A new poll says the public blames oil companies more than President Obama and Republicans for high gas prices
– Former House Speaker Newt Gingrich (R-Ga.), who will announce his candidacy for president this week, has called for abolishing the Environmental Protection Agency.
– Senate Minority Leader Mitch McConnell (R-Ky.) blasted Democrats’ energy plans.
– Senate Majority Leader Harry Reid (D-Nev.) previewed the fight over oil industry tax breaks.
– And a judge dismissed a lawsuit Monday brought by Koch Industries against a group of anonymous pranksters.