U.S ENERGY SECRETARY PROPOSES OIL TAX INCENTIVESEnergy Secretary John Herringtonsaid he will propose tax incentives to increase domestic oiland natural gas exploration and production to the ReaganAdministration for consideration."These options boost production, while avoiding the hugecosts associated with proposals like an oil import fee,"Herrington told a House Energy subcommittee hearing. "It is myintention to submit these proposals to the domestic policycouncil and the cabinet for consideration and review."He said proposals, including an increase in the oildepletion allowance and repeal of the windfall profits tax,should be revenue neutral and promote domestic production atthe least cost to the economy and the taxpayers."The goal of the Administration policies is to increasedomestic production. I would like to shoot for one mln barrelsa year."The proposals were based on a DOE study released yesterdaywarning the United States was threatened by a growingdependence on oil imports."We project free world dependence on Persian Gulf oil at 65pct by 1995," Herrington said.He said it was too soon to say what the Administrationpolicy on oil tax incentives would be and indicated there wouldbe opposition to tax changes."Of course, to move forward with these kinds of optionswould require reopening tax issues settled last year (in thetax reform bill) -- an approach which has not, in general, beenfavored by the administration. I think what we need is todebate this within the Administration," he said.He said the proposals might raise gasoline prices.Herrington did not specifically confirm a report in today'sWashington Post that he had written to President Reagan urgingan increase in the oil depletion allowance.Asked about the report by subcommittee members, Herringtonsaid various proposals were under consideration and would bedebated within the Administration to determine which would havethe most benefits at the least cost.