Energy package goes to floor today

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In a year of lots of talk without a lot of accomplishments, Congress begins debate today on an energy package that would allow some offshore drilling and provide various energy tax credit extensions, including that for the $1/gallong biodiesel tax credit. A similar bill is expected to be debated in the Senate this week. However, with a contentious election year, sources don't expect the package to make its way to the president's desk.

The House is scheduled to debate the energy package for three hours today, with a vote scheduled around , the Oil Price Information Service (OPIS) reported today.

The bill does include for limited offshore drilling. However, Republicans and Democrats still disagree over how much and how far offshore should be allowed.

The energy package also contains most of the same language from H.R. 6049, an energy tax extenders bill that the House passed in May, but which has been unable to pass the Senate due to disagreements over how to offset its cost.

Among the biofuel provisions of the tax package:

  • A one-year extension of the $1/gal biodiesel tax credit, the small biodiesel producer credit of 10cts/gal and the $1/gal production tax credit for diesel fuel created from biomass, all through Dec. 31, 2009. The provision would also eliminate "current-law disparity" by allowing second-use biodiesel (which currently receives 50cts/gal) to receive the same, full $1/gal tax credit as other biodiesel, and eliminates the requirement that renewable diesel must be produced using a thermal depolymerization process. However, the $1/gal biodiesel tax credit is limited to diesel fuel produced solely from biomass, so diesel fuel that is created by co-processing biomass with other feedstocks (e.g., petroleum) would only qualify for a 50ct/gal tax credit. Additionally, the biodiesel tax credit would close up the so-called "splash and dash" loophole; and
  • An extension and an increase of the alternative refueling stations tax credit. The bill increases the 30% alternative refueling property credit (capped at $30,000) to 50% (capped at $50,000), to businesses that install alternative fuel pumps. The credit is extended through 2010.

In a new addition, the House energy bill now includes language from a similar energy tax extenders bill in the Senate that would give pipeline owners the same tax benefits they receive for moving both renewable fuels and petroleum products.

Under the House Democratic energy package, the $18 billion price tag for the energy tax incentives would be paid for by repealing a pair of tax breaks provided to the five largest oil companies, which has drawn criticism from House Republicans.

 

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