Energy Firms' Tax Break Bid is Adding Up-Costly Subsidies Adding Up

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Energy firms' tax break bid is adding up
Conservative critics say costly subsidies uncalled-for amid skyrocketing prices

Zachary Coile, Chronicle Washington Bureau

Wednesday, April 20, 2005
 
Washington -- The growing price tag of tax breaks to oil, gas, nuclear, coal and other energy producers in a new House energy bill is raising concerns among White House officials and some conservatives, who say the costly subsidies aren't needed at a time of sky-high energy prices.

Republican leaders had promised a slimmer version of the energy bill the House has passed the last few years to avoid worsening the federal deficit. But a new analysis by a watchdog group showed that lawmakers added $35 billion in the last three weeks since the bill was introduced -- a total of $88.9 billion in subsidies to industry over 10 years in the bill.

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Some fiscal conservatives in Congress want to go a step further. Rep. Jeff Flake, R-Ariz., has offered an amendment to eliminate all the grants and subsidies in the energy bill, which he calls "corporate welfare."

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For example, a $125 million provision in the bill would convert a clean coal plant in Healy, Alaska, into a regular coal-fired plant because the cleaner technology was not cost-effective and the plant has been idle since 2001. The provision was requested by Alaska lawmakers. "It just proves this whole idea of clean coal is a fallacy," said Erich Pica, an energy specialist at Friends of the Earth. "If the federal government already spent money to build a clean coal plant and now is converting it back into a conventional coal-burning facility, what is the point of this whole program?"



http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/04/20/MNGA4CBM461.DTL