House repeals 'Big Oil' tax breaks
It also boosts royalty payments for drilling to $14 billion over 10 years, capping the Democrat's '100 hour agenda.'
WASHINGTON (Reuters) -- The new Democratic-led House Thursday passed legislation aimed at "Big Oil" that would roll back some industry tax breaks and force energy companies to pay more drilling royalties, valued at $14 billion over 10 years.
Passage of the bill by a vote of 264-163 capped House Speaker Nancy Pelosi's 100-hour agenda, which also included measures to raise the minimum wage, lower student loan interest rates and bolster homeland security.
The $14 billion raised from the additional royalties and repealed tax breaks would fund research for renewable energy sources. The measure still must be approved by the Senate and the president before it becomes law.
Going after major integrated U.S. oil firms like Exxon Mobil Corp., Chevron Corp. and ConocoPhillips has been a top priority for the House Democratic leadership, which says they have earned record profits at the expense of U.S. motorists paying high gasoline prices.
"The oil and gas industry is extraordinarily well established and well off," said House Democratic leader Steny Hoyer. "It does not need the American taxpayer's help to be successful or to make a dollar."
About half of the bill's savings comes from eliminating a lower tax rate on oil companies, which will bring in about $6.5 billion from 2007 to 2016, according to a congressional estimate. The lower tax rate had been given to all U.S. manufacturers in 2004, including oil companies.
The rest of money would come from a "conservation fee" on oil and gas production that the bill would impose on energy companies that refused to renegotiate faulty leases signed in 1998-99, which would raise about $7.6 billion.
Shares of oil majors, including ExxonMobil (Charts), ConocoPhillips (Charts), Chevron (Charts) and Royal Dutch Shell (Charts) ended Thursday's trading session lower except for BP (Charts) which edged slightly higher.