* Democratic leader says will seek a Senate vote soon
* Measure not seen lowering high gasoline prices
(Adds quotes, details, analysts reactions)
By Richard Cowan and Timothy Gardner
WASHINGTON, April 27 U.S. Senate Majority
Leader Harry Reid said he would move quickly to pass
legislation ending tax breaks for major U.S. oil companies, as
President Barack Obama requested this week.
"We need to take away the subisidies of these five major
oil companies," Reid told reporters, adding that the companies
have "broken all records" for profits.
Reid's remarks came on the same day BP (BP.L), one of the
major oil companies, reported first quarter profits of $5.5
billion despite setbacks from last year's massive oil spill in
the Gulf of Mexico.
However, any repeal passed by the Senate would likely be
blocked in the Republican-controlled House of Representatives.
Republicans argue that killing the tax breaks ultimately
would increase, not lower, retail gasoline prices.
Lawmakers are searching for ways to battle rising gasoline
prices, which come amid continued high unemployment.
Both Democrats and Republicans are hoping to tap into voter
anger over gasoline prices, which at a national average of
$3.88 a gallon are about $1 a gallon more than a year ago.
"We have to do something about these soaring gas prices,"
On Tuesday, U.S. Attorney General Eric Holder voiced
concerns about some "disturbing" developments in energy markets
that the Justice Department will look into.
Repealing the long-held oil firm tax breaks could give the
federal government additional revenues, which some want to use
for deficit-reduction and others want to invest in clean
Don Stewart, a spokesman for Senate Republican leader Mitch
McConnell, noted that the Senate rejected a move earlier this
year to end some oil company tax breaks, with seven Democrats
joining Republicans in opposition.
One analyst said the bill could pass in the Senate because
the price of oil has become such a hot button issue among
"The bill does stand some chance as Republicans as well as
Democrats are hearing from their constituents that Big Oil is
somehow manipulating oil prices," said Charles Ebinger, a
senior fellow at the Brookings Institution.
But he said stripping the major oil companies of the
subsidies would do little to cut crude prices.
"The bill is great politics, but it represents an
abnegation of responsibility because it doesn't explain to the
American people that it's not going to change the oil price."
Christine Tezak, an energy policy analyst at Robert W.
Baird & Co., said the bill could gain support if the money
saved was used for a popular initiative such as supporting the
transformation of vehicles to run on natural gas.
White House economic adviser Gene Sperling said on Tuesday
part of the subsidies to the oil industry could be used for
deficit reduction and some could be used for research and
development of renewable energy. [ID:nN26289394]