- The Washington Times - Thursday, November 3, 2005

The Bush administration clashed with Senate Republicans yesterday over proposals to use oil company profits to beef up heating assistance for low-income households this winter.

Energy Secretary Samuel W. Bodman said the administration opposes a proposal by Senate Finance Committee Chairman Charles E. Grassley urging oil and gas companies to devote a portion of their nearly $100 billion profits in the latest quarter to families who need the money to pay heating bills.

“No, sir, I wouldn’t support it. It is similar to a tax,” Mr. Bodman told reporters after speaking to an industry group. His remarks reflect the views of most Republicans, who have rejected efforts, mostly by Democrats, to tax oil company profits but now are worried about a public backlash over high oil prices and windfall profits.

Mr. Bodman said the administration would propose an alternative: expanding offshore drilling and establishing emergency national reserves of gasoline and natural gas — the most prevalent heating fuel — to augment the Strategic Petroleum Reserve.

Mr. Grassley’s proposal, outlined in letters to three oil and gas industry associations on Tuesday, asks energy companies to contribute 10 percent of their profits to fuel funds operated by states and utility companies that supplement the federal heating assistance program.

“In light of record profits and rising energy costs, it seems only logical for the companies to practice good corporate citizenship by helping low-income families and seniors,” said the Iowa Republican, whose state is one of many in the Midwest where heating bills are expected to rise 50 percent on average this winter.

Mr. Grassley, whose powerful committee writes tax law and oversees charitable organizations, also asked the associations for status reports on charitable giving by the energy companies.

He reminded them that they have “a responsibility to use these record profits to invest in more exploration, production and refining capacity to increase supply of petroleum products.”

Many of the oil companies have been using their record profits to pay down debt and distribute dividends to stockholders, as well as increase executive pay, invest in new oil projects and environmental controls, and cover an estimated $35 billion in losses to Gulf of Mexico oil facilities from hurricanes this season.

Some oil and gas industry representatives have called for expanded heating assistance this winter in light of record high heating oil and natural gas prices that are expected to burden many families. They rarely have volunteered, however, to contribute their own profits to the cause.

The tax committee chairman appeared to be acting to pre-empt an even more punitive measure against oil companies backed by a Republican from a Northern state whose constituents face high heating bills this winter.

Sen. Susan Collins, Maine Republican, is co-authoring an amendment to the budget reconciliation bill to pay for $3 billion in federal heating assistance this winter with a tax on oil company profits. Also sponsoring the measure are Sen. Charles E. Schumer, New York Democrat, and Sen. Edward M. Kennedy, Massachusetts Democrat.

“It has become perfectly clear that the big oil companies are cashing in while American families are being left to choose between food on their table and gas to drive their car or oil to heat their homes,” said Mr. Schumer.

Given the enormous revenues the oil companies amassed when crude prices topped a record $60 per barrel this summer, a tiny fraction of their profits would be needed to fund the program, he said.

The federal Low Income Home Energy Assistance Program is administered by states, which set limits on who can receive the assistance. In Maryland, a family of four with an income of more than $29,025 would not be eligible for assistance.

The federal program, which would get $2.2 billion under the budget pending in Congress, has been popular among Republicans and Democrats alike. Six of the Senate’s Republicans would have to join Democrats, if they vote as a bloc, to pass the amendment.



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