Wednesday, November 16, 2005

Senate panel votes to end Big Oil tax break


Senate panel votes to end Big Oil tax break

By Tom Doggett

WASHINGTON (Reuters) - With the oil industry enjoying record profits from high prices for gasoline and other petroleum products, the Senate Finance Committee on Tuesday voted to repeal a $1 billion tax break for big oil companies.

Congress had included the tax break, which related to certain expenses for oil and natural gas exploration, in a broader bill to update U.S. energy policy that President George W. Bush signed into law this summer.

Executives from five major oil companies, Exxon Mobil, BP Chevron, ConocoPhillips and Shell Oil, told a televised Senate hearing last week that their companies did not need some of the tax breaks Congress provided.

Sen. Ron Wyden, a Democrat of Oregon, told the executives he agreed and on Tuesday he eliminated the tax break for big oil companies by attaching an amendment to a bigger tax relief bill considered by the Senate Finance Committee.

"I think it just looks absurd for us constantly to shovel out tax breaks when executives go on television and say they aren't needed," Wyden said. "They don't need tax incentives."

The five companies represented at last week's Senate hearing earned more than $25 billion in profits during the most recent quarter.

Wyden said the savings from ending the tax break for Big Oil would be about $1 billion over 10 years. Small oil companies would still get the tax incentive.

"Today's modest action starts the long march to start to reform the tax breaks as they relate to the oil industry, and limits these incentives to the smaller oil companies that actually need the help the most," Wyden said.

Wyden said he will work with other lawmakers to modify his plan to come up with more acceptable language, including what is the definition of a big oil company, when the tax relief bill comes to the Senate floor for a vote.