US Senate To Launch Energy Bill In Wake Of Enron Debacle

by Mike Godfrey, Tax-News.com, New York

29 January 2002

Senate Majority Leader Tom Daschle, (D - S.D.), introduced an energy bill with Senate taxwriter and Energy Committee Chair Jeff Bingaman, (D - N.M), and said he intended to bring it to the Senate floor very shortly. The House recently approved an energy bill with $33bn of tax breaks aimed mostly at large energy companies, but Daschle said the Senate energy tax package would focus more on conservation incentives. The Democrats are however unlikely to get their way in the closely-divided Senate, where 60 votes will be needed for passage of a bill.

Earlier in the week, Senate Finance Committee member John F. Kerry, (D - Mass.), said he opposes much in the House Republican plan (HR 4), particularly its emphasis on drilling for oil in the Arctic National Wildlife Refuge. Kerry plans to highlight alternative and renewable energies in the coming weeks as the preferred pathway to energy independence.

"America has a choice between two competing visions," Kerry said. "I see a world where even as we drill because it makes economic sense and we have to, our primary focus shifts to cajoling and exciting a new marketplace for those alternative and renewable energy sources because there are compelling reasons to do so."

Kerry said Congress could weigh the tax incentives against other budget priorities or enact the incentives without offsets. "If we are prepared to be in deficit to achieve certain goals that we are setting today, could we not also make the choice to do some of these things in order to accomplish the longer-term goal?" he asked.

Kerry also argued that the House bill gave too many tax breaks to the oil and gas industries, which he said had greater access to Vice President Cheney's energy task force meetings. "Neither innovative private-sector companies nor the public interest were permitted to compete fairly and openly for the White House ear," Kerry said. "Old thinking passed through the doors of 1600 Pennsylvania Avenue far more often and easily than new thinking."

Reflecting current concerns over the influence that failed energy company Enron may have had on administration proposals for tax incentives, some Senate Democrats said they want to know how the administration developed its energy policy before they begin considering a bill. Sens. Byron L. Dorgan of North Dakota, Ernest F. Hollings of South Carolina, Carl Levin of Michigan, and Joseph I. Lieberman of Connecticut asked the General Accounting Office to continue to seek information from the administration to explain who attended Vice President Dick Cheney's energy task force meetings and how participants may have shaped policy proposals.

Republicans said however that they know of no provisions in the House bill that would have specifically benefited Enron. Senate Finance Committee member Don Nickles, R-Okla., pointed out that the tax incentives for production in the House bill would mainly help small firms maintain production in marginal wells.

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