For the fourth time in 14 months, House Democrats this week will bring to the floor an energy bill (H.R. 5351) long on rhetoric and short on reality. Rather then develop an energy policy we can all agree on, Democrats have instead shown their commitment to recycling by re-heating an energy bill that will raise gas prices while delivering far less than it promises in terms of developing new sources of energy.

Fortunately, their short-sighted attempts to enact an energy policy through the tax code, at best, will be met with the President's veto pen, because it is a deeply flawed measure that fails to recognize our continuing reliance on fossil fuels and the fact that our short-term and long-term energy security demands new domestic production.

Last January Speaker Pelosi asserted, "Democrats have a common sense plan to help bring down skyrocketing gas prices." Yet, one year later the nationwide average for a gallon of gas has increased from $2.23 to $3.13 – hardly the "new direction" Americans bargained for when Democrats took control of Congress. It is true that there are market forces at work beyond the control of the Congress; but only the most naïve of optimists could really believe that higher taxes on domestic energy producers is going to bring prices down.

Think about it – by raising taxes on the companies who find, refine, and transport gasoline – you inherently discourage investment and exploration of new energy. The end product is higher prices at the pump for all Americans and a further reliance on foreign energy.

I understand the motivation at work here. Every few months, ExxonMobil reports its profits, and just as regularly, the Democratic majority expresses it's dismay and intention to get Uncle Sam's hands on more of the money.

It is true that oil companies are profitable. It is not something worth trying to argue. But their profits are hardly out of line. In fact, a review of the Fortune 500 shows that more than 100 of those companies earned greater profits as a share of revenues as the much vilified ExxonMobil.

By the precedent being set today, a future Congress, faced with the need to raise taxes, can simply find an industry it doesn't like and raise their taxes. And given how many companies have a higher profit margin than the oil and gas companies that should make for easy pickings.

Moreover, it is not like the oil companies are under taxed. Just this week, Taxnotes magazine published a review of effective tax rates among U.S. businesses. From 2004 to 2006, ExxonMobil's effective tax rate was 42.9 percent; Marathon oil was over 39 percent; and Conoco Phillips was at more than 42.4 percent. That leads to one simple question: how much is enough?

And perhaps even more amazing, the bill raises taxes on domestic companies while leaving in place the current tax rates for a company like Citgo, the U.S. subsidiary of notorious third-world dictator, Hugo Chavez's state-owned oil company in Venezuela. When Russia's Luk Oil gets into the refining business in the U.S., they, too, will be able to claim a partial deduction for their manufacturing expenses that the bill today is taking away from U.S. companies.

Why the favorable treatment for Citgo today and Luk Oil tomorrow? Because the bill repeals the section 199 manufacturing deduction for large integrated oil companies. Because these foreign-owned enterprises don't have any production in their U.S. subsidiary, they escape the repeal and will be able to continue to claim the partial deduction of these costs.

And there you have it – a recipe for an ineffective energy policy. Not only does this energy bill produce very little new energy, tax U.S. energy companies, make us more reliant on foreign sources of energy but it rewards a third-world dictator in favor of our own U.S. companies.

While I hope we will someday have the opportunity this year to examine and change our energy policy, today is not that day. Fortunately, like the three energy bills passed by the House in 2007, this measure is likely to meet its demise in the Senate.

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