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THE WALL STREET JOURNAL: Democrats to Press Oil Executives On Tax Incentives — and Polar Bears

By STEPHEN POWER
March 29, 2008; Page A2

Big Oil will be making an appearance on Capitol Hill this coming week as congressional Democrats open hearings on two topics important to the industry.

Top executives from Exxon Mobil Corp., BP PLC, Royal Dutch Shell PLC, Chevron Corp. and ConocoPhillips are expected to testify Tuesday before the House Select Committee on Energy Independence and Global Warming, in an event designed by Democrats to tap voters’ frustration with high gasoline prices.

With Exxon Mobil and Chevron recently reporting record profits, House Democrats are pushing legislation that would repeal $18 billion of tax incentives for oil and gas producers and use the savings to finance tax credits and other incentives for wind-power projects, solar panels and more energy-efficient cars. Their measure isn’t likely to become law anytime soon, however. A similar proposal died in the Senate in December, and the White House has threatened a veto of the current legislation.

Not surprisingly, the American Petroleum Institute, an oil-industry trade group in Washington, is voicing its objections. The group says the bill would drive production overseas and make it harder for U.S. oil companies to compete against global rivals. “We don’t have an objection to funding these alternative [energy] sources, but there’s no justification for singling out the oil industry” while other manufacturers continue to enjoy tax breaks, says John Felmy, a senior economist with the petroleum group.

Meanwhile, in another policy dispute with big implications for oil producers, Senate Democrats plan a hearing Wednesday on the Bush administration’s failure to meet a statutory deadline for deciding whether the polar bear should be designated a threatened species.

In keeping with timetables set by the Endangered Species Act, the Interior Department was supposed to reach a decision on the matter in January, after announcing back in December 2006 that the bear’s Arctic habitat “may literally be melting.” Days before the deadline, however, the agency’s Fish and Wildlife Service said it needed more time, citing the complexity of the issue and the need to review public comments on new scientific research.

Environmental groups have sued the Interior Department in federal court over the delay, arguing that the agency has all of the information it needs, and the agency’s inspector general has opened an inquiry into the matter. Oil companies have lobbied against listing the bear as threatened, arguing that such a move isn’t warranted based on the bears’ current population and that listing the animal as threatened will trigger costly new restrictions on their operations in Alaska. The number of polar bears globally is estimated at 20,000 to 25,000.

An Interior Department spokesman Friday declined to offer a timetable for reaching a decision on the bear’s status.

Write to Stephen Power at [email protected]

http://online.wsj.com/article/SB120675759079273939.html

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