Washington (Platts)--19Jun2007

The US Senate Finance Committee Tuesday unveiled a new energy tax package
that seeks about $29 billion in incentives for renewable and alternative
energy and increases to $28.5 billion the amount the panel proposes to levy on
oil and gas companies to pay for the tax breaks. 

     On Friday, the panel released its first draft of the energy tax act,
which is expected to be added to a wide-ranging energy bill currently being
debated on the Senate floor. That proposal initially called for $16 billion in
tax breaks for alternative and renewable energy, while taking away $14.6
billion from the oil industry.

    The new proposal, introduced by Senate Finance Committee Chairman Max
Baucus, Democrat-Montana, includes a new 13% excise tax on "the removal price
of any taxable crude oil or natural gas produced from federal submerged lands
on the Outer Continental Shelf of the Gulf of Mexico." The new excise tax
would bring in revenues of $10.6 billion over 10 years, according to the Joint
Committee on Taxation.

    "The removal price is defined as the amount for which the barrel of
taxable crude oil or barrel of oil equivalent of natural gas is sold by the
taxpayer," according to the proposal. "In the case of sales between related
parties, the removal price is the constructive sales price of the oil and
natural gas. Finally, there will be allowed as a credit against the excise tax
an amount equal to royalties paid under federal law with respect to taxable
crude oil and natural gas, with the credit not to exceed the tax paid."

		--Cathy Landry, cathy_landry@platts.com