Nevada Sen. Heller knocks oil company tax breaks

LAS VEGAS (AP) — U.S. Sen. Dean Heller urged Congress to close some oil company tax loopholes Tuesday in a policy shift that comes after a months-long Democratic campaign to depict him as a lackey for big oil.

His proposed overhaul of federal energy policy represents new terrain for the Nevada Republican, who has voted multiple times against eliminating oil company tax breaks. Many Republicans argue removing these subsidies could drive up fuel costs.

Heller also called for reduced gas taxes for motorists and urged the federal government to approve TransCanada's Keystone XL pipeline during a speech on the Senate floor. His staff said the proposed amendment represents a smart compromise that would overhaul an unfair tax code while providing consumers relief by reducing costs at the pump and increasing the nation's fuel supply.

Democrats countered that the policy was aimed solely at blunting attacks that allege Heller supports oil companies over consumers. A campaign spokesman for Heller's likely general election opponent, U.S. Rep. Shelley Berkley, described the policy as "a backflip that would make an Olympic gymnast proud."

It's unclear if it will make it to a vote. Democratic Senate Majority Leader Harry Reid of Nevada did not say Tuesday whether he would allow for any amendments to the oil bill that represents President Barack Obama's energy agenda. Reid supports Berkley's campaign.

Heller's version differs significantly in many respects from the legislation proposed by Democratic Sen. Robert Menendez of New Jersey. Heller would not extend tax credits for plug-in electric vehicles, energy-efficient homes or energy-efficient appliances, which his Senate office described as "failed stimulus programs." The amendment calls for increasing domestic oil production and limiting federal regulations.

But his proposed policy would also end some of the same oil subsidies that Democrats seek to repeal, a move that reflects Heller's recent efforts to appease his conservative base while simultaneously courting moderates who want Republicans and Democrats to work together in Congress. Nevada is a battleground state and most elections are won in the middle of the political scale.

Heller spokesman Stewart Bybee said the amendment is consistent with Heller's longtime promise to close corporate tax loopholes. Heller has also called for working across the aisle to compromise on issues important to taxpayers.

Bybee called the measure revenue neutral. He said any increase in fuel costs caused by eliminating the tax breaks would be offset by the reduced gas tax and the increase in domestic fuel production. In contrast, the Democrats' proposal aims to partly reduce the federal deficit through oil tax revenue.

Heller has been an outspoken proponent of the proposed 1,700-mile oil pipeline that would carry roughly 700,000 barrels a day from Canada through environmentally sensitive terrain to the Gulf Coast. Environmentalists oppose the project.

President Barack Obama last week called for the speedy approval of the southern leg of the pipeline, which would remove a critical bottleneck in the country's oil transportation system.

The average price in Nevada for regular, unleaded gasoline is $3.88, up 19 cents from a year ago, according to AAA.