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House Again Passes Energy Tax Bill Favoring Renewables Over Oil

By Daniel Whitten

Feb. 27 (Bloomberg) -- The U.S. House for the third time in more than a year approved new taxes on the oil industry to pay for incentives for renewable energy and efficiency.

The $18.1 billion measure, versions of which have been rejected twice by the Senate, would remove a $13.6 billion tax credit from the world's five biggest public oil companies, and impose a $4.5 billion tax on oil and gas companies operating abroad. Money from the policy changes would promote wind and solar power and offer incentives for energy savings technology.

The 236-182 vote comes a day after the price of oil closed at a record $100.88 and during a week when the Energy Department reported that the price of average retail regular unleaded gasoline climbed almost 9 cents to $3.13 a gallon. The White House again threatened to veto the measure yesterday.

``We have seen no indication that Republican opposition to the oil and natural gas tax hikes have abated, making the offsets the Democrats seek for the renewable programs the albatross on the bill,'' said Christine Tezak, an analyst for Stanford Group Co. in a Feb. 22 report.

In December, the Senate dropped a $13 billion energy tax measure after President George W. Bush threatened to veto an energy bill with the taxes. Democrats fell one vote short of the 60 they needed to overcome obstacles to the measure, and sent the bill, which included the first new vehicle fuel economy standards in three decades, to Bush without a tax plan.

``The bill would use the tax code to target tax increases on a specific industry in a way that will lead to higher energy costs to U.S. consumers and businesses,'' the White House said in a statement threatening a veto.

The bill ``invests in the clean renewable energy that will put us on a path toward energy security and energy independence in a fiscally responsible way -- by repealing subsidies only to big oil companies already making record profits,'' House Speaker Nancy Pelosi said on the House floor today.

To contact the reporter on this story: Daniel Whitten in Washington at [e-mail]
Last Updated: February 27, 2008 16:41 EST