100 Hours: Big Oil


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One of the hottest issues contained on incoming speaker Nancy Pelosi's 100 Hours platform is the Oil Industry.

The American people are getting squeezed at the gas pump while the oil industry makes headlines for record profits.

During the lame-duck congress, House democrats fired a warning shot across the bow of the oil industry with a narrowly defeated bill that would have closed a legal loophole that is keeping the oil industry from paying a projected $10 billion over the next decade. That bill went down 205-207 in the republican controlled congress.

The same legislation is expected to be introduced as part of the first 100 hours of the 110th Congress later this week where it is expected to pass easily.

The problem actually dates back to the Clinton Administration which negotiated about a thousand leases for oil exploration in the Gulf of Mexico. Oil companies, under the legislation that allows the drilling, are supposed to be paying royalties on revenue from those fields if oil goes over $34 a barrel (which it has been for like four years). The problem is that the Clinton Administration failed to include any such clause in the leases. The proposed legislation seeks to force the renegotiation of those leases to see the clauses put in place. It is estimated that the industry has already avoided paying billions of dollars in royalties due to the legal loophole.

Also in Democratic sites is a tax break passed a couple of years ago giving a "manufacturing" credit to drilling companies that has also resulted in "several billions" of dollars in lost tax revenue.

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