Obama Calls for End of Oil Tax Breaks

 

Everybody in the audience at Nashua Community College received a copy of this chart.

In an energy speech Thursday repeating well-honed themes, President Obama sharpened his call for getting rid of what he called "outrageous" and "inexcusable" tax subsidies to oil companies. Like his energy speech at the University of Miami on Feb. 23, this one was on a campus, Nashua Community College, in New Hampshire:

Right now, four billion of your tax dollars subsidize the oil industry every year.  Four billion dollars. These are the same companies that are making record profits off of us right now—tens of billions of dollars a year. Every time gas prices go up, and you fill up your car, they make even more.

Tell me—does anyone really think Congress should give them another four billion dollars this year?

Of course not. That’s outrageous. It’s inexcusable. And I am asking Congress to eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks, so we can put every single Member on record: You can either stand up for the oil companies, or you can stand up for the American people.

Chances are nil that Congress will dump the tax breaks. A similar effort last year failed in the Democratic-controlled Senate. No way they can pass in the Republican-controlled House. But they are likely to play rather well to many Americans who have been leaning more in a populist direction lately and see tax breaks as incompatible with record oil-company profits and low effective tax rates that some years let oil giants avoid income taxes altogether. Obama has also included the elimination of these subsidies as part of his 2013 budget, with an eye toward saving $40 billion in revenue over the next decade.

In remarks no doubt making many environmental advocates queasy, the President  again met head on Republican claims that his policies have stood in the way of increased domestic oil production and contributed to rising oil prices and gasoline prices. The latter, which have risen sharply in the past few months, have sparked concerns among Democrats that Republicans will use them as a cudgel in the November elections.

On the contrary, Obama said—illustrating with a chart showing U.S. oil imports having dropped below 50 percent on his watch—domestic oil production has increased, with a "near-record number of oil rigs operating right now." Millions of additional acres have been opened up for oil and gas exploration. More than 400 drilling permits with new safety rules have been approved since the BP blow-out in the Gulf of Mexico.

He continued his pre-emptive attacks on Republican complaints about his rejection of TransCanada's northern route for the cross-border Keystone XL pipeline. He said the administration has approved many other pipelines, including one between Oklahoma and Texas that is part of TransCanada's original plans for Keystone. All this has created jobs and helped the economy, Obama said.

Against this backdrop of extensive new drilling, however, Obama said, as he has done many times previously, that the United States cannot drill its way out of its dependence on foreign oil since it only contains 2 percent of world reserves and consumes around 20 percent of total annual production.

The president also repeated previous remarks that there is no "silver bullet" in energy. The United States must do everything it can, he said, to increase oil and gas production but also invest in new technologies in wind, solar and fuel-efficient vehicles, among other things.