Democrats, ironically, are seeking to carve out new subsidies for oil refineries in an omnibus spending bill being negotiated in Congress, amid horse-trading with the GOP for an extension of valuable tax subsidies for the wind industry.
The move, led by Sen. Tom Carper, D-Del., has conservative groups jumping up to point out the “hypocrisy,” given Carper’s long-standing advocacy for repealing oil subsidies in favor of clean energy resources.
The amendment is in response to a Republican effort to add a measure to the spending bill to lift the 40-year-old ban on oil exports. Refiners on the East Coast have campaigned against removal of the export ban. They argue that lifting the ban would raise the cost of oil for them to refine into gasoline, diesel and jet fuel, and force them to close facilities.
Carper’s amendment would help insulate refineries against such an impact by providing a $3-per-barrel credit to the facilities to weather the price shocks.
“Actually, he is essentially giving a giant taxpayer subsidy to certain refineries that qualify,” said Justin Sykes, federal affairs manager for the conservative Americans for Tax Reform. “It’s a $3 tax cut per barrel of oil refined from the [Northeast] and other refineries [because] if the export ban is lifted they (falsely) think they could be hurt,” Sykes said in an email.
Sykes pointed out that the measure could, “ironically,” benefit Koch Industries, owned by conservative donors the Koch brothers.
“It’s just a crazy situation to see. And for Carper to do this after his stance on subsidies is just absurd,” Sykes said.
The spending bill debate has become consumed this week by horse-trading between Democrats and Republicans over energy subsidies. Primarily, GOP lawmakers would like to see the oil export ban lifted, but Democrats won’t agree to that unless the Republicans allow an extension of expired wind energy tax credits up to 10 years.
The renewable tax credits aren’t going to be enough to get a deal on oil exports, say lobbyists tracking the debate. “No one is going to go for it,” says one lobbyist. And a 10-year extension of the wind credit is just “irrational.”
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