Congress wants to take tax breaks away from Big Oil and give the money to alternative energy research. But President Bush may not let Congress fund alternative energy in such a way. He thinks Big Oil should continue to enjoy special status. The big question right now is: What Will George Do?

The House of Representatives is looking at a bill to wean Big Oil away from government support. Despite record earnings over the past two years, and earnings that are still more than okay by any standards — not to mention stock that goes up as the rest of the market tanks — Big Oil companies like Exxon (XOM) and Chevron (CVX), among others, are still receiving subsidies from the U.S. government. They also get special tax breaks and, through loopholes, have the ability to avoid paying royalties on profits they receive from oil pumped on public lands. And yet, Reuters reports the following:

Still, the White House has threatened to veto the bill over the repealed tax breaks.

Senate Majority Leader Harry Reid, whose chamber passed its energy bill in June, said on Thursday that President George W. Bush was more interested in "giving massive tax breaks to oil companies, while consumers pay more at the pump."

While Senator Reid may be grandstanding a bit, the fact remains that President Bush is threatening to veto the bill because he thinks Big Oil should have the special tax breaks.

Congress thinks that the money should go toward developing alternative energy, rather than back into Big Oil's already deep pockets. If Congress is successful, and the bill isn't vetoed, this could mean good news for alternative energy investors (and with the stock market down and providing all sorts of buying "opportunities", it could be even better news). Even with a presidential veto, it could mean good news for alternative energy investing. With Big Oil in the news for its profits and its special privileges, more people might decide to pressure on their representatives for more alternative energy funding, which would also benefit companies that invest in renewable energy sources.

Of course, there is still much to be wary of. Alternative energy is popular right now, mainly because of gas prices and oil supply concerns. What happens if prices drop a little and supply stabilizes? Additionally, some alternative energy companies have yet to turn a profit, making them riskier investments. The prospect of increased funding from Congress is hopeful, but what happens if that funding fails to materialize? Whether that funding materializes sooner, rather than later, depends a great deal on answering the WWGD question.

Disclosure: I own no stocks in the companies listed above. I am, however, considering various alternative energy investments.

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