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  • michaelisin4u michaelisin4u Apr 14, 2010 1:48 PM Flag

    Ax tens of billions of $$$$ worth of tax credits 4 the Oil & NatGas industry


    Ax tens of billions of $$$$ worth of tax credits 4 the Oil & NatGas industry

    US Tax Panel Chairman: US Needs To Expand Renewable Energy Credit

    Of DOW JONES NEWSWIRES APRIL 14, 2010, 12:11 P.M. ET
    WASHINGTON (Dow Jones)--Congress should expand tax credit programs that encourage domestic manufacturing of renewable and other low-carbon energy technologies, the chairman of the House Ways and Means Committee said Wednesday.

    The Obama Administration has said it wants to boost funding for an existing program that was oversubscribed to put a fresh wind in the U.S. renewables industry, revitalize the economy and help the country better compete with other nations such as China that are beginning to lead in clean tech manufacturing.

    In the absence of laws that curb greenhouse gas emissions or that set federal mandates on clean energy production, and as credit markets dried up after the financial meltdown, the renewables industry has begun to falter. Other countries with incentives that subsidize the more expensive, but lower-carbon, energy technologies compared to conventional fossil fuel energy, and nations with cheaper labor pools, are accelerating manufacturing of low-emitting technologies such as wind turbines, solar panels and electric car batteries.

    The Obama Administration is aiming to more than triple renewable energy production in coming decades and force conventional greenhouse gas-emitting energy producers to cut their emissions. A climate bill and renewable energy mandate has so far failed to pass Congress, but the Administration is using other powers such as the Clean Air Act, tax incentives and other federal authorities over rates and project approvals to encourage low-carbon technologies.

    "We have to make certain this demand is satisfied with goods produced in the U.S.," Chairman Sander Levin, (D., Mich.) said at a hearing on energy tax policies.

    "If we are not aggressive about expanding our green manufacturing capacity, these manufacturing jobs will be created overseas and the United States will become more reliant on products that are produced outside of our borders," he said.

    The stimulus bill passed last year provided $2.3 billion in investment tax credits for low-carbon technology manufacturers, but more that $8.1 billion in applications flooded Treasury and the Department of Energy. The Administration has proposed an additional $5 billion of these tax credits for a new round of competitive awards.

    To pay for the new tax incentives, the Administration and Democratic leadership want to ax tens of billions of dollars-worth of tax credits for the oil and natural gas industry.

    Republicans on the Ways and Means Committee challenged the oil sector tax repeals, saying it would increase reliance on foreign crude, cost jobs and raise energy prices.

    "I don't know how you can tax 85% of energy and still grow the economy," said Dave Camp, (R., Mich.), the tax panel's ranking member.

    But Michael Mundaca, Treasury's assistant secretary for tax policy, said, "we don't see a need for (the tax credits)," which he said were leading to "over-investment."

    Democrats have so far failed to see those repeals approved after several attempts in recent years.

    Mundaca said the Administration was working to change the tax code to incentivize both demand and supply of clean technology. Treasury is also seeking to expand tax breaks for energy-efficient appliances, cars, and buildings while the Environmental Protection Agency said it will recommend efficiency measures at power stations, refineries and other large, industrial emitters as part of new rules to cut greenhouse gases.

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