26 October 2005pressconnects.comJohn Machacek
Sen. Hillary Rodham Clinton proposed on Tuesday that oil companies be required to use some of their profits over the next two years to pay for new tax incentives to spur development of cleaner, cheaper energy.
A "strategic energy fund" could generate as much as $20 billion a year and go far in helping the United States reduce its dependence on foreign oil, the New York Democrat told a group of investors, entrepreneurs and service providers interested in alternative energy.
"We used to make polluters pay for their cleanup through Superfund," Clinton said, referring to the government program to clean up toxic waste sites. "And now we need for the oil companies to share the burden of lifting America up and out of the looming energy crisis."
Under Clinton's plan, oil companies would pay an alternative energy development fee. The fee would be taken solely out of "unanticipated profits from the sky-high oil prices," she said, and would not be passed on to consumers.
Companies that use their profits to expand refining capacity, improve fuel efficiency or invest in alternative energy would not have to pay the fee.
"Now is the perfect time for oil companies, flush with cash, to transform themselves into energy companies," Clinton said. "British Petroleum and Shell are already taking encouraging steps in this direction. But our country, and our country's companies, as the world's largest energy consumer and emitter of greenhouse gases, should lead the way."
Officials at the American Petroleum Institute, the trade group for the oil industry, decried Clinton's proposal, which they said appeared to be calling to reinstate the windfall profits tax imposed on the industry during the 1980s.
"Some people seem to be motivated by this misguided view that we are making windfall profits, but the fact of the matter is that we are making average returns," John Felmy, the institute's chief economist, said in a phone interview. "Our numbers are very large because our companies are very large."
Felmy said Clinton's proposal also reminds him of the federal government's "costly failure" years ago to use the former Synfuels Corp., a government agency, to direct where energy investments should go. He said oil companies today are the largest investors in solar, wind and geothermal technology.
Clinton has championed alternative energy partly by securing federal funding for the development of hydrogen fuel cells at a General Motors research facility near Rochester. She has also worked to link investors with renewable energy companies in New York.
But Clinton used her speech to Cleantech Venture Network, a national group building private-sector support for alternative energy, to call for broad changes in the nation's energy policies.
She called for doubling the current tax credits for advanced technology vehicles, such as hybrids; pressed the Bush administration to investigate gas price gouging, and urged the federal government to replace its vehicle fleet with fuel-efficient cars and trucks by 2010.
