Politics & Government

Alaska Sen. Begich stands firm on oil industry subsidies

WASHINGTON — As Alaska Sen. Mark Begich walked onto the floor of the U.S. Senate on Wednesday, he felt the pressure from other Democrats over his decision to oppose their plan to end tax breaks for the oil and gas industry.

"It didn't take long for several senators to come up to me," Begich said Wednesday after his floor speech against the proposal. The tax measure is set come to a vote before the Senate next week.

When his colleagues asked what he was doing, Begich said he had this response: "Speaking my mind. What are you doing?"

"I don't have a problem saying what's on my mind," he added. "If (the bill) hurts Alaska, they're going to hear from me."

Senate Democrats have introduced legislation that they say would eliminate more than $21 billion in subsidies and tax credits over the next 10 years for the five largest, most profitable oil companies in the world. The bill is known as the "Close Big Oil Tax Loopholes Act."

It puts an end to a number of loopholes that allow oil and gas companies to claim tax credits. It also ends royalty relief for deepwater offshore drilling.

The proceeds from repealing the loopholes would go toward reducing the deficit.

The legislation has the backing of President Barack Obama, who called for an end to the tax breaks in his State of the Union address. It has virtually no chance of passage in the Republican-controlled House, which on Wednesday passed a number of energy bills that expand drilling.

In the Senate, two Democrats stand in the way of ending the tax breaks: Begich and Sen. Mary Landrieu, D-La., who called on her colleagues to vote against a bill she called "a gimmick." The two Democrats, hewing to their oil-patch roots instead of partisan politics, paired Wednesday on the Senate floor to oppose the legislation.

"It will not -- although it is being touted as -- it will not reduce gasoline prices by one penny," Landrieu said.

Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, also opposes the plan, said her spokesman Robert Dillon. Like Begich, she believes there's room for examining tax credits across the manufacturing sector, as well as the corporate tax code. But both she and Begich say that the oil and gas industry has been singled out.

"If you want to talk about tax policy, great," Begich said. "Let's talk about tax policy in the broad sense for all the subsidies that we give corporate America."

Begich said they should be talking about taxes on high earners, not industries that create jobs. The focus on tax code reform is more productive than "let's just beat on 'em because it's popular," Begich said of oil and gas companies.

Begich said he doesn't doubt his fellow Democrats have good intentions in using the proceeds to reduce the deficit.

He said, though, that he was pleased to have an opportunity to speak in general about increased domestic oil and gas production, particularly in Alaska.

"It gives me a chance to really talk about the broader issue, which is the message of domestic production, conservation, renewable energy," he said. "And also to explain the Alaska experience."

Begich also was among 17 U.S. senators who on Wednesday called for a regulatory crackdown on speculative Wall Street trading in oil contracts. They sent a letter to the Commodity Futures Trading Commission saying that excessive betting in oil markets is driving energy prices far beyond supply-and-demand fundamentals.

The White House last month announced creation of an interagency task force charged with probing price gouging of consumers and manipulation of financial markets. The task force is led by U.S. Attorney General Eric Holder.

Kevin G. Hall of the McClatchy Washington Bureau contributed to this report.