In its last roll call vote of the 109th Congress, the US Senate on Saturday passed by a 79-to-9 vote final legislation that includes the Domenici-Landrieu Gulf of Mexico Energy Security Act, S. 3711. The House had passed its version of the bill on Friday with a 367-45 vote.
Coauthored by Sen. Mary Landrieu (D-LA) and Senate Energy Committee Chairman Pete Domenici, (R-NM), and endorsed by the White House in July, the plan opens 8.3 million acres in the Gulf of Mexico to new oil and natural gas production and shares 37.5% of the new revenues with Louisiana, Texas, Mississippi and Alabama.
The funds are specifically dedicated to coastal wetlands restoration, hurricane protection, levee and flood control projects in the four energy-producing states. An additional 12.5% is dedicated to the state side of the Land and Conservation Fund, which funds the acquisition of parks and green spaces across the country.
The legislative package also includes several key tax provisions, including a two-year extension of the Gulf Opportunity (GO) Zone tax incentive that provides strong motivation to invest in the Gulf Coast. The measure will now go to President Bush for his signature.
The area opened by the legislation for drilling is projected to produce enough natural gas to sustain more than 1,000 chemical plants for 40 years, and enough oil to keep 2.7 million cars running and 1.2 million homes heated for more than 15 years, according to the bill’s sponsors.
The Gulf Opportunity (GO) Zone tax incentive passed in 2005 allows businesses to take a 50% tax reduction for new facilities or equipment in areas impacted by Hurricanes Katrina and Rita. Current law requires that businesses put new facilities or equipment in place by the end of 2008, but the package will extend the benefit until 2010.
Other energy tax provisions in the legislative bundle included:
Extending of credit for electricity produced from certain renewable resources. This Section 45 extension for one-year is critical to continued installation of commercial electricity generation projects from wind and solar sources.
Extending of tax credit to holders of clean renewable energy bonds.
Modifying of the clean coal gasification tax credit by providing a technical fix to the 2005 Energy Policy Act by setting a different reduction target for sulfur dioxide emissions from sub-bituminous coal in order to qualify for investment tax credits for installing clean coal technology.
Extension of deduction for energy efficient commercial buildings extending for one year a deduction for energy-efficient commercial buildings that reduce annual energy and power consumption by 50 percent.
Extension for one year of a business credit to eligible contractors for building energy efficient new homes.
Extending for one year a residential credit of 30% for purchasing qualified photovoltaic property and solar water heating property, and for qualified fuel cell power plants.
Extending for one year a 30 % energy credit for the business installation of qualified fuel cells, stationary microturbine power plants, and solar equipment.
Extending a reduced excise tax rate for qualified methanol or ethanol fuel produced from coal.
New special depreciation allowance for cellulosic biomass ethanol plant property.
Modification of the coke and coke gas production tax credit.