Sen. Mike Lee Pushes Bill To End All Energy Tax Subsidies

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Michael Bastasch DCNF Managing Editor
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Utah Republican Sen. Mike Lee has introduced legislation to eliminate tax subsidies for all energy sources, from renewables to hydrocarbons, to end market distortions in the energy industry.

Lee’s Energy Freedom & Economic Prosperity Act also reduces tax rates to facilitate energy production in the U.S. The bill has a companion bill in the House introduced by Kansas Republican Rep. Mike Pompeo last year.

“Washington should not be using taxpayer money to pick winners and losers in the energy industry,” Lee said in a statement. “Consumer-driven, free-market competition provides a much better way to ensure Americans have access to reliable, affordable energy.

Lee says his bill would “level the playing field for all energy producers, forcing them to compete for consumer dollars rather than political favors.”

According to the Congressional Budget Office, about three-quarters of the $16 billion in energy tax credits went towards renewables and energy efficiency measures. Only one-quarter went toward hydrocarbon fuels.

Republicans have been pushing back against tax credits for renewable energy sources, like wind and biodiesel, as Congress looks for ways to reform the tax code. The Wind Production Tax Credit which subsidized wind power at 2.3 cents per kilowatthour, was not extended through 2014 due to fierce political resistance among Senate and House Republicans.

Senate Democrats and some Republicans are trying to extend tax credits for biodiesel and other biofuel production for at least another year, if not more. A proposal by Oregon Democratic Sen. Ron Wyden and Utah Republican Sen. Orrin Hatch would extends tax credits for electric motorcycles, biofuels, energy-efficient homes and coal produced on Indian lands.

But the bipartisan Wyden and Hatch bill opted not to include extending renewable energy production tax credits due to fierce political opposition.

“American families shouldn’t have to subsidize energy companies when they’re having trouble enough paying their utility bills,” said Pompeo, whose House bill to ax energy subsidies has 34 cosponsors.

Republicans argue that energy subsidies don’t make power sources cost-effective or reliable. Instead pleasing consumers, subsidized companies will engage in political activity to boost their market share and take taxpayer dollars.

“Companies should have customers, not political patrons,” Pompeo added. “With Sen. Lee’s leadership in the Senate on this important measure, we can eliminate insider deals on energy policy and save money for families across the country.”

Renewables were once seen as inevitably the next major source of U.S. power because of global warming concerns and fears that the country would become too reliant on foreign oil and natural gas. But now that domestic oil and gas production is booming, renewables are becoming a less attractive solution to America’s energy independence and climate issues.

This development, coupled with massive government-backed green energy company failures, have prompted more lawmakers to push for more natural gas and oil production to boost the economy.

Oil production on private and state lands has soared by 61 percent since 2009 and natural gas production has jumped up 33 percent during that time, according to the Congressional Research Service.

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