The United States House of Representative narrowly passed legislation last month that would increase incentives for renewable energy production, while removing tax breaks for the so-called ‘Big Five’ oil companies, as well as firms controlled by foreign governments such as Citgo (Venezuela).

Entitled the Comprehensive American Energy Security and Consumer Protection Act, the bill was passed by the House on 16 September 2008. It calls for 15% of all electricity used in the United States to be generated from renewable resources by 2020.  It would also establish a market for buying and selling renewable energy credits, allowing energy providers that surpass the 15% standard to profit by selling excess credits to those providers who do not meet the standard.

The bill extends and expands tax incentives for renewable electricity such as solar and wind, as well as for plug-in hybrid cars and energy-efficient homes. It also creates a Renewable Energy Reserve to invest in renewable energy resources and alternative fuels, promote new energy technologies, develop greater efficiency and improve conservation.

Another feature of the bill is a section on “Accountability and Integrity of the Federal Energy Program”, which aims to crack down on royalty fraud and corruption at the Mineral Management Service (MMS), the agency in charge of collecting royalties from oil and gas companies. Among the provisions in this section are prohibitions on accepting gifts and employment from any person seeking action from or conducting business with MMS.

In order to pay for these measures, the bill would impose royalties on oil companies for leases granted in the Gulf of Mexico in 1998 and 1999. Oil companies holding 70% of these leases pay no royalties at the moment, which costs U.S. taxpayers an estimated US$ 15 billion a year, according to figures put out by House Speaker Nancy Pelosi.

The bill would also repeal certain tax deductions for the Big Five oil companies, and any oil company in which a foreign government owns a 50% or more stake.

Notably, the bill also brings an end to the 27-year-old moratorium on off-shore drilling, meaning that drilling is now allowed three miles off the U.S. coast, excluding certain protected areas, such as the Georges Bank in New England.