Wednesday, March 7, 2012

Harry Reid to give $72 billion to Gas and Oil

Please say it ain't so Uncle Harry!

Re: H.R.1380 - New Alternative Transportation to Give Americans Solutions Act of 2011 - "To amend the Internal Revenue Code of 1986 to encourage alternative energy investments and job creation."

My senator from Nevada has listed on his website (PDF) as his first priority for 2012 - "Senator Reid will continue working to ensure Nevada leads the nation in clean energy jobs by taking advantage of the state’s abundant natural resources like solar, geothermal and wind...Additionally, Senator Reid is working to create clean energy jobs by extending production and investment tax incentives, investing in research and promoting solar and wind projects on appropriate public lands."

Nothing was said about natural gas.

Also on his website, tax subsidies aren't mentioned either when he's states his current position on the newly proposed transportation bill. But in an older post from July 8, 2009 it states, "Nevada Senator Harry Reid, Senator Robert Menendez, Senator Orrin Hatch and T. Boone Pickens today announced the introduction of legislation supporting vehicles that run on clean natural gas. The NAT GAS Act is sponsored by Senator Menendez, with Senators Reid and Hatch as original co-sponsors."

Said Pickens: “I am proud to stand with Senator Menendez and co-sponsors Majority Leader Reid and Senator Hatch in support of this important natural gas legislation. This bipartisan legislation does more to reduce our foreign oil dependency crisis than any other piece of legislation in the past 40 years. As I have said many times before and will continue to say, natural gas is cleaner, cheaper, it’s abundant and it’s American. This bill will accelerate the use of natural gas in vehicles and is the only way I know to quickly and effectively reduce our dependence on foreign oil. For too long, our dependence on foreign oil has been one of the factors influencing our foreign policy and if we can eliminate that issue by using our own domestic natural gas resources I am confident that it will benefit our national security, our economy and the environment.”

R. Emmett Tyrrell Jr. at The Washington Times writes, "The estimable Wall Street Journal editorial board took issue with the equally estimable T. Boone Pickens, the legendary oilman, over the Nat Gas Act. The Journal argued with its customary lucidity that Mr. Pickens‘ idea of subsidizing natural gas, even for a short period, was ill-advised. The Journal argued that natural gas should be supplied according to free-market practices. It argued that no subsidies had been necessary for Henry Ford to build the first Model T, nor were subsidies necessary to put gas stations across America for servicing the Model Ts."

Conservative lobbyists representing the interests of big businesses, such as the U.S. Chamber of Commerce, supports the bill - - and it's being sold as "bipartisan". (See the list of tax credits here)

There's a growing alliance between Democratic leaders and the natural gas industry...T. Boone Pickens is already a billionaire, so why then, is Harry Reid trying to give him more of your money?

Democrats are looking to attach a natural gas subsidy bill as an amendment by Bob Menendez to the proposed transportation bill that's now in the Senate.

And besides T. Boone Pickens, it can't hurt multi-billionaire George Soros either, who now owns more than $130 million worth of Westport Innovations, a leading natural gas engine company (which could get up to $200 million in the bill).

The "partnership" is the result of years of work by tycoon T. Boone Pickens, to shed a well-earned partisan image and work productively with Harry Reid.

Earlier yesterday, Democrats failed to muster the needed 60 votes to overcome a filibuster, but Senate aides said negotiations were continuing and the bill would most likely to return to the floor. Pickens' efforts shows how much the power of money can wield in Washington -- sometimes without even being spent.

At a fundraiser last month for "a Nebraska Republican Senate candidate", the candidate told some of those gathered that Pickens told him he couldn't financially back his bid because he had promised Harry Reid that, because the majority leader had agreed to push through his natural gas bill, he would not target races that might cost him his majority.

One of the people at the event then told HuffPost Hill. Then the HuffPost Hill told me. Now I'm telling you.

Last November Senate Majority Leader Reid, who ceaselessly invokes class-warfare rhetoric to attack Republican opposition to tax increases and over-regulation (you go Harry!), is now proposing what could be called The T. Boone Pickens Bill." (Read more: Fuel-subsidy fight pits Koch vs. Pickens - by Timothy P. Carney, Senior Political Columnist for the Washington Examiner)

The transportation bill (H.R.1380) is worth $109 billion and is being touted as creating 3 million construction jobs. It stalled in the Senate on Tuesday amid battles over amendments that have little or nothing to do with transportation (unless you count subsidies for natural gas in the event that natural gas cars will be on the highways soon).

House Republicans had their own version of the transportation bill titled the American Energy and Infrastructure Jobs Act, and signaled that it would be one of their few attempts at major legislation before the 2012 election. Boehner argued in last November that the House bill would "create millions of jobs" (All his bills are supposed to).

Although Harry Reid may be moving to add natural gas subsidies to the Senate bill, it doesn't include other conservative "sweeteners" like more offshore drilling. (as though that, or the Keystone pipeline, could ever reduce the price of gasoline).

Gabe Elsner at the Checks and Balances Project wrote about another energy bill (H.R.3308), the Energy Freedom and Economic Prosperity Act (PDF) - "To amend the Internal Revenue Code of 1986 to terminate certain energy tax subsidies and lower the corporate income tax rate."&

This week Representative Mike Pompeo (R-Kan.) and Senators Jim DeMint (R-S.C.), Mike Lee (R-Utah) and Ron Johnson (R-Wis.) announced that this legislation (PDF) would eliminate investment in renewable energy, while leaving in place $72 billion in tax breaks to the oil and gas industry. They claim their bill, H.R.3308, doesn’t target a specific industry, but according to a report from the American Petroleum Institute, the two oil and gas subsidies it “cuts” have already (PDF) been zeroed out of the budget.

Combined, these three Republican congressmen have accepted more than a quarter of a million dollars in campaign contributions from the oil and gas industries according to the Center for Responsive Politics. Broken down by sector, the oil and gas industry is Rep. Pompeo’s biggest contributors by a more than 3:1 margin.

The bill maintains more than $72 billion in subsidy spending on the oil and gas industries. The cost of keeping Harry Reid in office?

Gabe Elsner attempted to ask Rep. Pompeo about this glaring omission from his bill. But he was denied access to the press briefing. So I will ask it here:

"How can you claim to look out for American taxpayers when your bill only removes two zeroed out oil and gas subsidies and leaves the $72 billion in actual oil and gas tax breaks alone?"

NEW YORK, March 7, 2012 (Reuters) - "U.S. natural gas futures fell as mild late-winter weather and bloated supplies drove the front-month to a new contract low and six-week spot low despite a recent slowdown in drilling that could curb record high output." (Current natural gas prices here)

On September 19, 2007 T. Boone Pickens told CNBC that the price of oil could rise to $100 per barrel. "Demand is up and supply is flat, so it's got to go on up," said Pickens, whose company is betting on natural gas for vehicles. "I can give you an Oklahoma guarantee that natural gas will never sell above diesel and gasoline prices [as fuel for vehicles].

But if efficient natural gas automobiles are ever invented, and a re-fueling infrastructure was put in place, I will guess that the price of natural gas will cost just as much as gasoline made from crude oil...after all, it's always about maximizing profits. Just as it is now with crude oil, the companies will scale back production and supply to drive prices higher - - unless the energy industry was nationalized.

1 comment:

  1. UPDATE...

    Senator Reid is on the verge of making a bad deal on the Transportation bill that would allow Republicans to force votes on radical anti-environmental provisions including Keystone XL and blocking the EPA's clean air boiler rule. Call Harry Reid: Reject Keystone XL and other anti-environmental amendments.

    Senator Harry Reid, 202-224-3542