House Democrats easily passed legislation on Thursday that would rescind $14 billion in tax breaks and subsidies for oil drillers and reserve the money to develop alternative energy projects and conservation technologies.That’s lame criticism. The bill to rescind these tax breaks “singled out” oil companies precisely because the original tax breaks singled out this industry.
The measure passed 264 to 163 …. Passage came despite opposition from the oil industry and the Bush administration, which said the bill singled out the companies for higher taxes and could increase the country’s dependence on foreign oil.
One provision is intended to correct errors in drilling leases signed by the Interior Department in the late 1990s that allowed oil companies to escape billions of dollars in royalties over the next decade.And it sounds like the Clinton crew may deserve a piece of the blame for this. The Times reports:
… The Government Accountability Office estimated that the mistake has cost the Treasury $1 billion, and could ultimately cost it $10 billion if the leases remain unchanged.
The leases entitled companies drilling in deep water to avoid royalties on much of their initial production, but in 1998 and 1999 officials during the Clinton administration omitted a standard escape clause that eliminated the incentive if oil prices climbed above $34 a barrel.