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Repeal of Oil, Gas Tax Breaks Headed for Defeat in Senate

A Democratic bill (S. 940) to end $21 billion in oil and natural gas tax breaks for the five largest producers over the next decade was destined for defeat in the Senate late Tuesday.

The bill, sponsored by Sen. Robert Menendez (D-NJ), would require 60 votes to head off a Republican filibuster, which it wasn't likely to receive. None of the 47 Republicans in the Senate are expected to vote in favor of the measure that would revoke the tax breaks for Chevron, BP, Royal Dutch Shell, ConocoPhillips and ExxonMobil. But even if by some remote chance it should clear the Senate, it is expected to be dead in the House.

"I think most people expect it [the Senate bill] to fail. I don't think there are 60 votes there," said a knowledgeable Capitol Hill aide. For Lee Fuller, vice president of government relations for the Independent Petroleum Association of America, the big question is whether the Senate even has 50 votes to support the measure, much less than 60.

"It's all theater," he told NGI. President Obama, who favors ending the tax breaks for Big Oil, has called on "Democrats and Republicans [to] come together and get this done."

On Wednesday Democrats may return the favor by blocking the GOP legislative vehicle for combating rising fuel prices by encouraging offshore drilling in the Gulf of Mexico and offshore Virginia and Alaska, CQ Roll Call reported. The Capitol Hill aide noted that Republicans don't have the 60 votes to head off a Democratic filibuster of the drilling legislation.

At a hearing Tuesday Sen. Lisa Murkowski of Alaska, the ranking member of the Senate Energy and Natural Resources Committee, expressed concern that a proposal raising oil and gas taxes could be tacked onto energy legislation voted out of committee. "Many of us are wary [of this]," she said.

"That's probably a legitimate concern. That's the way the sausage is made around here," the Capitol Hill aide said.

"If...our committee's bill is ultimately attached to a handful of unworkable liability provisions or any other poison bills, my prediction is that it will again fail," Murkowski said. The Senate energy panel voted out a comprehensive bill in June 2009, which was never brought up for a vote on the Senate floor and ultimately died. The committee is expected to vote out energy legislation before the Memorial Day recess.

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