An effort by Senate conferees to attach an estimated $12 billion, 10-year package of energy tax credits and incentives to broad corporate cut tax legislation fell flat Tuesday.

Sen. Craig Thomas (R-WY) sought to add energy tax breaks, but was met with opposition from the leaders of the conference committee, House Ways and Means Committee Chairman Bill Thomas (R-CA) and Senate Finance Committee Chairman Chuck Grassley (R-IA).

The failure of the Senate conferees to restore $12 billion in energy tax breaks to the tax bill did not come as a surprise. The chances “[were] not very good” that this would happen, said a spokesman for the Senate Energy and Natural Resources Committee.

The defeat of the Thomas amendment came as House and Senate conferees met for the third time Tuesday to negotiate a conference report on the underlying corporate tax cut bill, which would resolve a trade dispute with the European Union.

The Thomas proposal was a somewhat downsized version of the $19 billion energy tax package that the Senate passed in May as part its corporate tax bill (S. 1637).

Many other energy tax proposals that were offered by both House and Senate conferees Tuesday were either defeated or ruled out of order, a Capitol Hill observer said.

Thomas’ mark of the corporate tax bill conference report, which was unveiled Monday night, contains only a handful (about 15) of the energy tax provisions that were part of the Senate corporate tax bill, including accelerated depreciation for an Alaska natural gas pipeline from the North Slope to the lower 48 states.

The bulk of the tax incentives deal with electricity and renewable fuels. Other than the reduction in the overall corporate tax rate, there was “nothing [in the bill] that affects our producers,” said Jeff Eshelman, a spokesman for the Independent Petroleum Association of America (IPAA).

Independent oil and gas producers were looking for a marginal well tax credit and Section 29 credit for unconventional production, such as coalbed methane and tight sands.

Nevertheless Sen. Jeff Bingaman (D-NM), a conferee, remained optimistic. “I’m hopeful that we can, on a bipartisan basis, work together to improve further the package of energy tax incentives in the final conference report.”

The committee is looking to vote out a final conference report on the corporate tax cut bill by the end of the week.

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