Democrats in the U.S. Senate on Wednesday unveiled a new energy package that would revoke $17 billion in tax breaks extended to big oil companies like Exxon Mobil Corp and slap a 25 percent windfall profits tax on firms that don't invest in new energy sources.
The Consumer-First Energy Act — assembled by Senate Majority Leader Harry Reid and other key Democrats — would also stop the Energy Department from filling the Strategic Petroleum Reserve until crude oil prices average $75 a barrel or less for 90 days.
The Democrats' energy bill seeks to lay the blame for record-high gasoline prices over $3.60 a gallon on the Bush administration, big oil companies like Exxon and the OPEC oil cartel.
In a bill summary, Democrats point out that gasoline prices have more than doubled since President George W. Bush took office in 2001, while "Big Oil" companies made over $500 billion in profits over the same period.
"The Bush administration has led us down the path of the most significant energy crisis we have had in decades, if not in all time," Reid told reporters. "Big Oil is making money hand over fist while doing little to invest in alternative fuels yet Bush Republicans want to keep handing them huge tax breaks."
Republicans in the Senate in turn unveiled their own plan, which calls for new U.S. oil production in offshore areas as well as Alaska's Arctic National Wildlife Refuge.
The bill seeks to revive a plan already passed by both the Senate and the House of Representatives that would allow the federal government to sue OPEC — source of one-third of global oil supply — for price manipulation.
It also seeks to rein in speculation in oil markets, which Senate Democrats see as a prime mover behind crude oil prices which hit a record high of $123.79 a barrel on Wednesday.
The bill would prevent companies that trade U.S. oil futures from routing transactions through off-shore markets to evade position limits and requires the U.S. Commodity Futures Trading Commission to boost margin requirements for all oil futures transactions.
The bill would have to pass the Senate and be approved by the House and White House before becoming law.
