Senate Passes Gulf of Mexico Energy Security Act, Legislation Headed to President for Signature
December 9, 2006
11:27 AM
Washington, D.C. – The U.S. Senate early this morning passed the Gulf of Mexico Energy Security Act as part of a larger package extending several popular tax relief programs. The provision, crafted by Chairman Domenici, will bring 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas to market over the next several years.
In remarks on the Senate floor, Senate Majority Leader Bill Frist characterized the legislation as “one of the most significant accomplishments of the 109th Congress which will have a lasting impact on American consumers and our economy.”
The passage of the Outer Continental Shelf (OCS) energy plan builds on the enactment last year of the Energy Policy Act of 2005, both shepherded by Domenici as chairman of the Senate Energy and Natural Resources Committee.
Domenici thanked his Senate and House colleagues for their commitment to American consumers, businesses and manufacturers. “The OCS legislation is very important and should be something that everybody in this chamber is proud of. It is particularly fitting that the Senate pass the bill just as the cold winter was setting in and as families start seeing a sharp rise in their natural gas bills. The price of natural gas has more than doubled since October. We aim to ease the gas price volatility by increasing supply.”
Domenici noted that this is the first legislation in several years that opens new areas in American waters for energy development. “This will produce gas for millions of homes and thousands upon thousands of businesses,” he said on the Senate floor this morning. “It will be American-owned gas drilled by American companies, supplied to Americans by Americans with American dollars.” The legislation, he said, is a small but important step toward reducing America’s reliance on foreign energy.
The OCS legislation was part of a larger package that included several energy tax provisions to encourage more renewable energy, more clean energy and the increased conservation of energy.
“I think it’s fitting that we passed legislation that develops more oil and gas in tandem with a tax package that will increase the production of electricity from wind and solar power and help government, businesses and homeowners conserve energy and use it more efficiently,” Domenici said.
“I have always believed that increased production of fossil fuels is effective only if we also expand our production and use of renewable energies and make a concerted effort to use less energy. This package achieves all three goals. It complements last year’s energy bill in charting a course for this country toward a future of clean, abundant and affordable energy,” he said.
The energy tax provisions in the package include:
- Extending of credit for electricity produced from certain renewable resources. This Section 45 extension for one-year is critical to continued installation of commercial electricity generation projects from wind and solar sources.
- Extending of tax credit to holders of clean renewable energy bonds.
- Modifying of the clean coal gasification tax credit by providing a technical fix to the 2005 Energy Policy Act by setting a different reduction target for sulfur dioxide emissions from sub-bituminous coal, which already is a low-sulfur coal, in order to qualify for investment tax credits for installing clean coal technology.
- Extension of deduction for energy efficient commercial buildings extending for one year a deduction for energy-efficient commercial buildings that reduce annual energy and power consumption by 50 percent.
- Extension for one year of a business credit to eligible contractors for building energy efficient new homes.
- Extending for one year a residential credit of 30 percent for purchasing qualified photovoltaic property and solar water heating property, and for qualified fuel cell power plants
- Extending for one year a 30 percent energy credit for the business installation of qualified fuel cells, stationary microturbine power plants, and solar equipment.
- Extending a reduced excise tax rate for qualified methanol or ethanol fuel produced from coal.
- New special depreciation allowance for cellulosic biomass ethanol plant property.
- Modification of the coke and coke gas production tax credit.
The Gulf of Mexico Security Act was cosponsored by Sen. Mary Landrieu, D-LA, Sen. David Vitter, R-LA; Sen. Lamar Alexander, R-TN; Sen. Thad Cochran, R-MS; Sen. John Cornyn, R-TX; Sen. Bill Frist, R-TN; Sen. Chuck Hagel, R-NE; Sen. Kay Hutchison, R-TX; Sen. Trent Lott, R-MS; Sen. Mel Martinez, R-FL; Sen. Mitch McConnell, R-KY; Sen. Jeff Sessions, R-AL; Sen. Richard Shelby, R-AL and Sen. Jim Talent, R-MO.
