HR 6: Toward More Energy Dependence

By January 18, 2007Energy

Last Election Day, in a rare victory for common sense in California, voters turned back a measure that would have put a surtax on oil produced in the state. Wisely, the electorate saw this for what it was: An attempt to make California oil more expensive to produce. The effect was easy to see: Production would be driven to other states and the price of gas would climb in the Golden State. Having failed in California, a prominent Californian, House Speaker Nancy Pelosi, aims now to take this bad idea national in the form of H.R. 6, which will likely reach the House floor today.

What H.R. 6 will do is repeal several tax provisions — or at least insofar as they apply to one industry — duly passed by bi-partisan majorities in both houses. Unfortunately (from Pelosi & Company’s perspective) some of these provisions benefit the oil industry by rewarding domestic exploration and production. Oh, the horrors! For example, it will rule oil and gas companies ineligible for an otherwise-legitimate tax deduction as a domestic manufacturer (in their case, of petroleum and petroleum by-products, like gasoline) under Sect. 199 of the American Jobs Creation Act of 2004 and will adversely change recently-passed depreciation rules for energy exploration activities. In so doing, it will not only take away some of the incentive for domestic exploration and production, but it will drive up the price of oil and will drive exploration overseas, making us even more dependent on foreign sources of oil. In other words, it will do to the US what the failed California proposition threatened to do to California.

And lest you think this cleverly-named CLEAN Act is about energy, think again. First of all, this is a Ways & Means Committee bill, an odd point of origination for energy legislation. Second, the Dems’ fact sheet on the bill is rife with poll-tested class warfare gibberish, sneering about “raking in record profits” and “Big Oil Giveaways.” Never mind that 90% of the nation’s oil and gas wells are drilled by the small independent producers and that ExxonMobil paid over twice as much in taxes in the 3d quarter of ’06 than they made in profits. This is a crusade, get outta the way.

You would think “energy dependence” would be a loser of a political cause, but apparently not when wrapped in Big Oil rhetoric. At the end of the day, HR 6 will leave us far more dependent on foreign sources of energy. The so-called CLEAN Act is one more step in the Dems’ war on profits, and a big step in the wrong direction on energy.

Join the discussion One Comment

  • Jay Draiman says:


    In order to insure energy and economic independence as well as better economic growth without being blackmailed by foreign countries, our country, the United States of America’s Utilization of Energy sources must change.
    “Energy drives our entire economy.” We must protect it. “Let’s face it, without energy the whole economy and economic society we have set up would come to a halt. So you want to have control over such an important resource that you need for your society and your economy.” The American way of life is not negotiable.
    Our continued dependence on fossil fuels could and will lead to catastrophic consequences.

    The federal, state and local government should implement a mandatory renewable energy installation program for residential and commercial property on new construction and remodeling projects with the use of energy efficient material, mechanical systems, appliances, lighting, etc. The source of energy must by renewable energy such as Solar-Photovoltaic, Geothermal, Wind, Biofuels, etc. including utilizing water from lakes, rivers and oceans to circulate in cooling towers to produce air conditioning and the utilization of proper landscaping to reduce energy consumption.

    The implementation of mandatory renewable energy could be done on a gradual scale over the next 10 years. At the end of the 10 year period all construction and energy use in the structures throughout the United States must be 100% powered by renewable energy. (This can be done by amending building code)

    In addition, the governments must impose laws, rules and regulations whereby the utility companies must comply with a fair “NET METERING” (the buying of excess generation from the consumer), including the promotion of research and production of “renewable energy technology” with various long term incentives and grants. The various foundations in existence should be used to contribute to this cause.

    A mandatory time table should also be established for the automobile industry to gradually produce an automobile powered by renewable energy. The American automobile industry is surely capable of accomplishing this task.

    This is a way to expedite our energy independence and economic growth. (This will also create a substantial amount of new jobs). It will take maximum effort and a relentless pursuit of the private, commercial and industrial government sectors commitment to renewable energy – energy generation (wind, solar, hydro, biofuels, geothermal, energy storage (fuel cells, advance batteries), energy infrastructure (management, transmission) and energy efficiency (lighting, sensors, automation, conservation) (rainwater harvesting) (energy and natural resources conservation) in order to achieve our energy independence.
    “To succeed, you have to believe in something with such a passion that it becomes a reality.”

    Jay Draiman, Energy Consultant
    Northridge, CA. 91325
    Jan. 18, 2007

    P.S. I have a very deep belief in America’s capabilities. Within the next 10 years we can accomplish our energy independence, if we as a nation truly set our goals to accomplish this.
    I happen to believe that we can do it. In another crisis–the one in 1942–President Franklin D. Roosevelt said this country would build 60,000 [50,000] military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now.
    The American people resilience and determination to retain the way of life is unconquerable and we as a nation will succeed in this endeavor of Energy Independence.

    Solar energy is the source of all energy on the earth (excepting volcanic geothermal). Wind, wave and fossil fuels all get their energy from the sun. Fossil fuels are only a battery which will eventually run out. The sooner we can exploit all forms of Solar energy (cost effectively or not against dubiously cheap FFs) the better off we will all be. If the battery runs out first, the survivors will all be living like in the 18th century again.

    Every new home built should come with a solar package. A 1.5 kW per bedroom is a good rule of thumb. The formula 1.5 X’s 5 hrs per day X’s 30 days will produce about 225 kWh per bedroom monthly. This peak production period will offset 17 to 24 cents per kWh with a potential of $160 per month or about $60,000 over the 30-year mortgage period for a three-bedroom home. It is economically feasible at the current energy price and the interest portion of the loan is deductible. Why not?

    Title 24 has been mandated forcing developers to build energy efficient homes. Their bull-headedness put them in that position and now they see that Title 24 works with little added cost. Solar should also be mandated and if the developer designs a home that solar is impossible to do then they should pay an equivalent mitigation fee allowing others to put solar on in place of their negligence.

    Installing renewable energy system on your home or business increases the value of the property and provides a marketing advantage.

    Nations of the world should unite and join together in a cohesive effort to develop and implement MANDATORY RENEWABLE ENERGY for the sake of humankind and future generations.