Chris Kearney | NSWA Vice President, Governmental Affairs
Committees in both the House and Senate continue to hold hearings on aspects of the Biden plan. The Senate Appropriations heard testimony from cabinet officials, including EPA Administrator Michael Regan, on a variety of issues addressed in the American Jobs Plan including climate change and other environmental issues. In the House, Interior Secretary Deb Haaland testified three times: before the House Interior-Environment Appropriations Subcommittee on her agency’s fiscal 2022 budget request; the Natural Resources Committee Subcommittee on Indigenous Peoples of the United States for a hearing on infrastructure priorities for Indigenous communities; and the House Transportation and Infrastructure’s Subcommittee on Water Resources and Environment on sustainable wastewater infrastructure.
Senate GOP legislators, led by Senate Environment and Public Works Ranking Republican Shelly Moore Capito, unveiled their approximately $600 billion infrastructure plan. While it was immediately rejected by Congressional Democrat leaders as insufficient in size and scope, Chairman of the Senate Energy and Natural Resources Joe Manchin (D-WV) complimented the Republicans for their effort and expressed his interest in working with them on various elements of their plan.
Wyden Introduces Clean Energy/Anti Oil and Gas Tax Bill
Senate Finance Committee Chairman Ron Wyden (D-OR) has introduced the Clean Energy for America Act. The legislation is intended to convert the existing regime of technology-specific energy tax credits into a “tech-neutral” approach to the tax code that allows for consolidation of current energy tax incentives into emissions-based provisions that incentivize clean electricity, clean transportation, and energy efficiency.
In so doing, the bill eliminates tax treatments for oil and gas companies, including expensing of intangible drilling costs, percentage depletion, deductions for tertiary injectants, and credits for enhanced oil recovery, marginal oil wells, coal gasification, and advanced coal projects.
The bill also reinstates the current taxation of multinational oil companies’ non-extraction income and ensures multinational oil companies are not specially exempted from the 2017 tax law’s global minimum tax. It also repeals the special treatment of fossil fuels under the publicly traded partnership rules, putting them on equal footing with other energy companies and closing down the “Lone Star Loophole.”
NSWA expects this bill to advance in some form this Congress. NSWA is engaged in bipartisan outreach to Chairman Wyden and other members of the committee regarding our strong opposition to the bill. We are also working with other national organizations that represent industries which also benefit from percentage depletion to educate their members on the need to maintain this provision.
Congressional Oversight Hearing on Oil and Gas
On Earth Day (April 22),The U.S. House Government Reform Committee’s Subcommittee On The Environment held a hearing entitled “The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis.”
The hearing focused on the perceived harm that oil and gas production is causing to the environment, promoted through availability of, among other thing, IDC and percentage depletion. The committee has no legislative or federal tax policy making law authority, thus highlighting the emphasis the House is placing on climate change matters and the role of oil and gas production.