The U.S. oil and gas industry survived an effort to repeal $21 billion in tax breaks over 10 years as three Democrats broke with Senate leaders who said the revenue should go to reduce the federal deficit.
Supporters fell short yesterday of the 60 votes needed to advance the bill after Republicans said the legislation would raise gasoline prices and increase dependence on foreign oil. Fifty-two senators supported proceeding and 48 were opposed, including Democrats Mary Landrieu of Louisiana, Ben Nelson of Nebraska and Mark Begich of Alaska. Maine Senators Olympia Snowe and Susan Collins, both Republicans, joined the Democrats.
Democrats said the oil companies can afford to give up the tax benefits after their combined first-quarter profits exceeded $30 billion. Senate Majority Leader Harry Reid said he would work to revive the measure in budget talks with Republicans, who are trying to cut more than $6 trillion in spending. “Instead of defending oil companies, Republicans should be defending the American taxpayer,” Reid of Nevada said before the vote.
A Republican-backed measure that would increase offshore production and expedite permits faces a vote today in the Senate. The legislation mirrors bills passed by the Republican- led U.S. House this month to speed Interior Department rulings on oil-drilling permits. Without action after 60 days, the application would be deemed approved.
A provision also would require lease sales in the Gulf of Mexico and off the coasts of Virginia and Alaska.
The Senate’s tax legislation targeted about $2 billion in annual tax breaks for Exxon Mobil Corp. of Irving, Texas, London’s BP Plc, Houston’s ConocoPhilips, Chevron Corp. of San Ramon, California, and The Hague-based Royal Dutch Shell Plc. Collectively the companies reported about $36 billion in first- quarter profits, Reid said.
