The House of Representatives sent a signal recently, with a vote to roll back billions of dollars in oil industry tax breaks or subsidies and invest the money in a renewable energy and efficiency fund. The clear message is this: Global warming is being taken seriously in the new Congress.
The vote, 264 to 163, is a significant step given the defection of many Republicans from the Bush administration's reluctant stance on climate change and its solid support of the oil industry. Time is running out for oil industry gifts and grants, despite the administration's pleas that the bill singled out energy companies for higher taxes that would somehow increase the country's dependence on foreign oil.
The bill rescinds $7.6 billion in tax breaks for oil drillers, breaks that were passed by Congress in 2004 and 2005. It also adds $6.3 billion to royalties paid by companies that pump oil and gas in publicly owned waters of the Gulf of Mexico and off Alaska.
Another provision targets mistakes in drilling leases, signed by the Interior Department in the late 1990s, that allow oil companies to avert billions in royalties over the next decade. A royalty-triggering threshold of $34 a barrel was omitted erroneously. With oil prices recently hovering in the $60 to $70 range, this is a loophole that should have been sealed.
Together, the tax and royalty breaks amount to billions of dollars in giveaways to big oil, which is far from destitute or in need of any type of subsidy.
The vote by the House of Representatives has the potential to create a pool of money aimed at providing renewable energy. That's especially important for New York State, which has its own alternative energy initiative and could potentially tap this pool to augment that effort. Alternative energy, in turn, could help wean this nation off foreign oil -- a step toward greater national security -- and curtail the need for carbon-based energy, which is tied to global warming. Efforts to set regulatory limits on industrial and power plant carbon dioxide emissions also target that goal, by creating a huge economic incentive to create renewable energy.
There is always the temptation for politicians, when confronted with a pool of money, to divert those funds to pet projects. It's a temptation worth avoiding for the greater good. The bill indicates the money should go to new energy sources. Now, it's time to define what that means.
The money should be structured so that much of it is used for the cleanest possible energy sources, whether it be solar, wind, geothermal or hydropower, or technologies such as hydrogen-based fuel cells.
The House vote was more or less expected in a newly Democratic configuration, but the Senate still must take up the House legislation. There is a closer Democrat-Republican margin there, and that could result in less than the dollar levels in the House bill. There is interest in the Senate to promote clean energy but, in terms of dollars, it is likely to do less than the House.
The House vote is a good first step or down payment. It should be followed up with global warming legislation and stricter federal corporate average fuel economy, or CAFE, standards, along with more political weight behind efforts to boost renewable energy.