Washington (Platts)--1Feb2008

US Senate Majority Leader Harry Reid revived talk of possible rollbacks
to oil and natural gas incentives Friday, saying that the high profits
reported by major oil companies for the fourth quarter of 2007 proved the
industry could afford to invest more in renewable energy.

The Nevada lawmaker hinted that Democrats in Congress might again try to
compel "Big Oil" to do so, by repealing oil and natural gas tax incentives for
major integrated petroleum companies as an offset for renewable energy and
energy efficiency tax incentives.

"Bush Republicans blocked our efforts last year to repeal Big Oil's tax
breaks and instead use that money to expand incentives for the production of
energy efficient vehicles and renewable energy, but we will try again this
year to do the right thing," said Reid.

"Democrats remain committed to restoring fiscal discipline and passing
real energy reform that not only lowers prices at the pump and reduces our
reliance on oil, but also strengthens our national security and protects our
environment," he added.

Senate Democrats fell short of the 60 votes needed to pass a
comprehensive energy bill in December that included the renewable extensions
and rollbacks. The measure was signed into law without the tax package.

The Senate will vote on an economic stimulus package next week that would
provide one-year extensions for renewable incentives through 2009 without
tapping oil companies to pay for them. That bill's prospects for passage are
uncertain, however.

"Any tax increase would not be stimulating to the economy, I think that's
pretty basic," said Mark Kibbe, a Senior Policy Analyst at the American
Petroleum Institute.

He said the trade association was prepared to make the same argument it
did in 2007: that a "tax increase" for domestic production and refineries
would drive investment overseas and make the US more dependent on imported
oil.

--Jean Chemnick, jean_chemnick@platts.com