Timeline: During Paris Talks, D.C. Breathed Life Into U.S. Oil Industry

Posted by Brad Johnson Tue, 15 Dec 2015 15:37:00 GMT

Martin Heinrich (D-N.M.), December 3:

Hein­rich pre­vi­ously voted against a pro-ex­ports bill that cleared the En­ergy and Nat­ur­al Re­sources Com­mit­tee on a party-line vote, but signaled that he could sup­port ex­ports if they’re coupled with strong re­new­able-en­ergy in­cent­ives. “We are look­ing for things that bring people to the table from both sides,” he said. “I think there is a real op­por­tun­ity here. I hope we real­ize it.”

“It’s effectively carbon-neutral” to allow crude exports, Sen. Martin Heinrich (D-N.M.) told reporters last week, “because you’re going to burn the oil someplace under the current regime.”

Tim Kaine (D-Va.), December 3:

“There is a wide range of opin­ion [in the Demo­crat­ic caucus], some pro, some con,” Sen. Tim Kaine, a Vir­gin­ia Demo­crat, told Na­tion­al Journ­al. “The ma­jor­ity opin­ion is prob­ably [that] we’d be will­ing to con­sider it if we got some very strong en­ergy-ef­fi­ciency and green­house-gas-re­du­cing pro­vi­sions along with it.”

Heidi Heitkamp, December 9:

“The good news is there is no one saying ‘absolutely no,’ and there is a range of belief systems in terms of what you would need in order to accomplish the lifting of the ban,” Heitkamp said Tuesday. “We believe we’re at a spot where we could actually get a deal.”’

White House Press Secretary Josh Earnest, December 9:
In a press conference on Tuesday, White House press secretary Josh Earnest reiterated the administration’s position, but wouldn’t threaten a veto of the omnibus or tax extenders package if a provision lifting the decades-old ban on crude oil was tucked inside.

Democratic Senator Wants to Add Oil-Refiner Subsidy to Crude Export Deal

Posted by Brad Johnson Thu, 10 Dec 2015 17:25:00 GMT

Tom CarperSenator Tom Carper (D-Del.) has proposed a tax credit for oil refiners to be added to legislation that would lift the decades-long ban on crude oil exports. This double-subsidy deal for the oil industry during international climate negotiations belies Carper’s claimed concerns about climate change but would benefit Delaware refineries.

Politico’s Elana Schor reports that Carper wants “a narrowly crafted tax credit that would particularly help the East Coast refiners with the most to lose if producers can sell their product overseas. The credit, which large, integrated oil companies could not collect, would also spread some love among refiners in California and the Gulf Coast, creating a large band of members of Congress who might be willing to back it. Sources tells Elana that oil patch Senators are likely to push back hard on Carper’s proposal.”

Download the draft Carper oil-refiner tax-credit language, or see below.

SEC. lll. CREDIT FOR FUEL REFINED AT CERTAIN REFINERIES.
(a) CREDIT AGAINST EXCISE TAXES.—
(1) IN GENERAL.—Subchapter B of chapter 65 of subtitle F of the Internal Revenue Code is amended by adding at the end the following new section:
‘‘SEC. 6433. CREDIT FOR FUEL REFINED AT CERTAIN INDEPENDENT REFINERIES.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by section 4081 an amount equal to the product of—
‘‘(1) the number of barrels of crude oil which—
‘‘(A) are received after December 31, 2015, at a refinery owned by the eligible taxpayer, and
‘‘(B) not taken into account under this section for any preceding period, and
‘‘(2) $3.
‘‘(b) LIMITATION.—The amount of crude oil taken into account under subsection (a) for any day shall not exceed 155,000 barrels.
‘‘© SPECIAL RULE FOR CERTAIN REFINERIES RECEIVING CRUDE OIL BY LONG-DISTANCE PIPELINE.—
‘‘(1) IN GENERAL.—In the case of crude oil received at a refinery which is capable of receiving crude oil from a pipeline which is in excess of 35 miles long as of January 1, 2015, subsection (a) shall be applied by substituting ‘$0.30’ for ‘$3’ in paragraph (2) thereof.
‘‘(2) ORDERING RULE.—For purposes of applying the limitation under subsection (b), crude oil shall be treated as being received first at refineries to which paragraph (1) does not apply.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—In this section—
‘‘(1) ELIGIBLE TAXPAYER.—
‘‘(A) IN GENERAL.—The term ‘eligible taxpayer’ means any taxpayer who owns a refinery other than a major integrated oil company (as defined in section 167(h)(5)(B)).
‘‘(B) AGGREGATION RULES.—For purposes of determining gross receipts under subparagraph (B), all persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as one person.
‘‘(2) BARREL.—The term ‘barrel’ means 42 United States gallons.
‘‘(3) FRACTIONAL RATE OF BARREL.—In the case of a fraction of a barrel, the credit allowed under subsection (a) shall be the same fraction of the amount of such credit with respect to a whole barrel.
‘‘(e) TERMINATION.—This section shall not apply to crude oil received after December 31, 2022.’’.
(2) PROTECTION OF HIGHWAY TRUST FUND.— The last sentence of section 9503(b)(1) of such Code is amended by inserting ‘‘or 6433’’ after ‘‘6426’’.
(3) CLERICAL AMENDMENT.—The table of sections for subchapter B of chapter 65 of subtitle F of such Code is amended by adding at the end the following new item:
‘‘Sec. 6433. Credit for fuel refined at certain independent refineries.’’.
(b) CREDIT AGAINST INCOME TAXES.—
(1) IN GENERAL.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
‘‘SEC. 45S. INDEPENDENT REFINERY CREDIT.
‘‘(a) ALLOWANCE OF CREDITS.—For purposes of section 38, in the case of an eligible taxpayer, the independent refinery credit determined under this section for the taxable year is an amount equal to the product of—
‘‘(1) the number of barrels of crude oil which—
‘‘(A) are received after December 31, 2015, at a refinery owned by the eligible taxpayer, and
‘‘(B) not taken into account under this section for any preceding taxable year, and
‘‘(2) $3.
‘‘(b) LIMITATION.—The amount of crude oil taken into account under subsection (a) for any day shall not exceed 155,000 barrels.
‘‘© SPECIAL RULE FOR CERTAIN REFINERIES RECEIVING CRUDE OIL BY LONG-DISTANCE PIPELINE.—
‘‘(1) IN GENERAL.—In the case of crude oil received at a refinery which is capable of receiving crude oil from a pipeline which is in excess of 35 miles long as of January 1, 2015, subsection (a) shall be applied by substituting ‘$0.30’ for ‘$3’ in paragraph (2) thereof.
‘‘(2) ORDERING RULE.—For purposes of applying the limitation under subsection (b), crude oil shall be treated as being received first at refineries to which paragraph (1) does not apply.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For purposes of this section—
‘‘(1) any term used in this section which is used in section 6433 shall have the meaning given such term under section 6433, and
‘‘(2) rules similar to the rules of section 6433(d)(3) shall apply.
‘‘(e) COORDINATION WITH CREDIT AGAINST EXCISE TAX.—The amount of the credit determined under this section with respect to any crude oil shall be reduced to take into account any benefit provided with respect to such crude oil under section 6433.
‘‘(f) TERMINATION.—This section shall not apply to crude oil received after December 31, 2022.’’.
(2) TREATMENT AS PART OF GENERAL BUSINESS CREDIT.—Section 38(b) of such Code is amended by striking ‘‘plus’’ at the end of paragraph
(35), by striking the period at the end of paragraph
(36) and inserting ‘‘, plus’’, and by adding at the end the following new paragraph:
‘‘(37) the independent refinery credit determined under section 45S(a).’’.
(3) DENIAL OF DOUBLE BENEFIT.—Section 280C of such Code is amended by adding at the end the following new subsection:
‘‘(j) CREDIT FOR INDEPENDENT REFINERIES.—No deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction taken into account in determining the credit under section 45S for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45S(a).’’.
(4) CLERICAL AMENDMENT.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
‘‘45S. Independent refinery credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to crude oil received after December 31, 2015.

Led By White House, Democrats Are Looking to Give Big Oil A Major Win During Climate Talks

Posted by Brad Johnson Wed, 09 Dec 2015 01:02:00 GMT

In a paywalled article at Politico Pro, reporter Elana Schor describes how the Democratic effort to cut a deal to lift the decades-long crude oil export ban is being quietly directed by the White House. The administration has quietly walked back its October veto threat against this top oil-industry priority, despite the global attention on climate change during the Paris climate talks. Remarkably, even climate champion Barbara Boxer (D-Calif.) indicated her willingness to cut a deal that would rejuvenate the tar-sands and Bakken-shale industry, telling Schor, “I’ve heard environmentalists say this is a great opportunity; others say it’s not.”

Schor’s story did not make mention of which environmental groups are on which side. The Sierra Club has been leading the fight to ensure the ban stands, whereas the National Wildlife Federation has been pushing for a deal in order to achieve some of its land-conservation goals.

The carbon pollution caused by lifting the ban on crude oil exports, depending on future oil prices, could be equivalent to the pollution from 42 new coal plants.

Lifting the crude oil export ban would be a dramatic blow to American prestige within the international climate negotiations, where the United States, led by President Obama and Secretary of State John Kerry, have been claiming the moral high ground. Youth activists from historically black universities who are monitoring the talks recently sent a video plea to President Obama and the U.S. Senate, saying “the ban must stand.”

White House keeps GOP hopes for oil exports alive

The White House on Tuesday declined to rule out accepting a Congressional measure to allow U.S. oil exports for the first time in four decades, a potential signal to senior Democrats who are considering striking a deal with the GOP to overturn the ban in exchange for other party priorities.

The White House “continues to oppose” a legislative provision rolling back the decades-old ban on exporting U.S. crude, spokesman Josh Earnest told reporters, “but I’m just not going to get into a detailed list of things we are going to veto or not veto.”

Asked about ending the ban as part of a potential budget package that would otherwise be favorable to the White House, a senior Obama administration official said only that legislation on the issue is “not needed at this time”- repeating the language and tone used previously that’s raised alarms among some green groups.

Climate Hawks Vote political director Brad Johnson urged President Barack Obama to close the door to oil exports to reinforce the administration’s goal of reaching a strong global emissions pact at the climate change conference in Paris this week.

“All the efforts of his climate negotiators in Paris could be blown away by this one boneheaded appeasement of Big Oil,” Johnson said.

One official at a group fighting to preserve the export ban said environmentalists are concerned that the White House’s “door [is] wide open for wheeling and dealing and trading.”

Some in the White House “think there’s a way to get a good conservation package” in exchange for allowing oil exports, said a source off the Hill who is closely tracking the talks who requested anonymity.

In addition to other controversies that are threatening to swamp a government funding deal outright, the source said, Obama’s aides are aware that handing Republicans a win on oil exports without significant wins for Democrats on other issues could look like “walking back the commitments the president made in Paris” to rein in U.S. emissions by nearly one-third over the next decade.

Though Johnson slammed as “unconscionable” the growing openness among some Democrats and green groups to a trade-off that would roll back the export ban in exchange for renewable energy and conservation benefits, that willingness to compromise showed no signs of abating on Tuesday.

Sen. Barbara Boxer (Calif.), top Democrat on the Environment and Public Works Committee, shrugged off environmentalist fears about trading conservation and renewables’ benefits for oil exports. There is “division” among green groups over whether to cut a deal, she said in a brief interview. “I’ve heard environmentalists say this is a great opportunity; others say it’s not,” she said.

Any deal would also likely include some type of aid for refineries in the Northeast that have benefited from cheap domestic crude that cannot be exported currently. Sen. Tom Carper (D-Del.) said he said he is in discussions for an approach “to make whole American refineries that in many cases would simply go out of business” should exports be permitted.

House Minority Whip Steny Hoyer (D-Md.) told reporters that oil exports were not objectionable enough to sink a possible deal on their own.

Ending the 1970s-era ban on exports, the year’s top priority for the American Petroleum Institute, is “not where we want to go,” Hoyer said. “But on the other hand, if there were substantial agreements by the Republicans on some things that we thought were very important, that might be something” to consider during the budget talks.

The Sierra Club’s New Jersey chapter called out its junior Democratic senator directly on Tuesday, pleading for Cory Booker to “stand up to Big Oil” by ruling out any change to the export ban.

“We already have 15 pipelines proposed throughout our state and this plan will bring more dirty fossil fuel infrastructure through our communities,” Sierra’s New Jersey director, Jeff Tittel, said in a statement.

SolarCity CEO Lyndon Rive, head of the nation’s biggest rooftop solar power company, fueled talk of a deal that would marry clean-energy tax benefits with conservation funding – as well as other Democratic priorities – during an interview in Paris yesterday. If allowing exports “in return, enabled us to have long-term visibility into continuing to incentivize and promote solar, then I think that’s a fair trade,” Rive said.

Even as lawmakers openly mull a deal, few in the Senate have reckoned with how the Democratic demands under a deal that allows exports would fare among senior House Republicans. Not only does House Natural Resources Chairman Rob Bishop want broader reforms in exchange for any extension for federal conservation spending, but many House conservatives are ideologically set against boosting breaks for renewable energy.

And unrelated disagreements over tax policies this week, such as the earned income credit, may yet force the GOP to punt on a broad package of tax-break extensions that would leave the Democrats without a vehicle for their must-have incentives for wind and solar. Should the tax package evaporate, prospects would dim for an oil exports deal despite the apparent White House openness.

“I think it would be really hard to support it without the tax provisions as part of a broader, pro-environmental package to accompany the lifting of the ban,” one Democratic aide said.