Newswire - Tax proposed on high oil profits

By Tara Fehr

WASHINGTON, Sept. 20 - Charging that oil companies are keeping energy prices artificially high, a pair of Democratic senators proposed a new tax Tuesday on what they view as excessive profits.

Senators Christopher Dodd (Conn.-D) and Byron Dorgan (ND-D) introduced legislation that would tax what they call "windfall profits," returning the money to consumers in the form of rebates for the winter.

"We are convinced this is deliberate," Dodd said of rising oil company profits.

Under their proposal, the tax would be imposed on crude oil sales that exceed $40 a barrel and would exclude such profits invested in new domestic oil and gas exploration, building new refineries or alternative energy resources.

"I'm not begrudging the oil industry making profits," Dodd said. "Just excess profits."

The price of a barrel of oil rose to $67 Monday, according to the Associated Press. The senators estimated oil companies are pulling in an extra $7 billion in profits every month

"There are many other industries with higher profits," said Jane Van Ryan, senior manager of communication for the American Petroleum Institute.

It is unlikely that the Senate will act upon the proposal.

Even if it were enacted, it would only have a minimal mitigating effect for New England residents this winter: The rebates would not come until tax time next April.

"We are very concerned about the increase of cost in all forms," Chris Clouet, superintendent for the New London School District, said.

The district is a member of a Connecticut consortium for fuel and heating, but the resulting savings from its membership in the group still might not be enough for heating and transportation this year.

New London is still waiting for the city council to allocate its school funds, which is scheduled to take place Oct. 3. Regardless, Clouet said, the school district will need whatever savings likely to be achieved from its consortium membership.

"We're hopeful this winter isn't going to be as bad as it's projected to be," Clouet said.

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