Monday, May 02, 2011

Oil Subsidies Are "Neither Right, Nor Smart, And They Should End"

Apr 30: In follow-up to his letter to Congressional leaders on April 26 [See WIMS 4/27/11], calling for an end to what he called subsidies to "yesterday's energy sources," President Obama used his weekly address to once again call for an end to at least $4 billion annually in taxpayer subsidies to oil and gas companies. Since the President's initial request to Congress, House and Senate Republican leaders have indicated there disagreement with and said they will not vote to end the subsidies [See WIMS 4/29/11].
    The President said, ". . .chances are you're having a tougher time paying the rising costs of everything from groceries to gas. In some places, gas is now more than $4 a gallon, meaning that you could be paying upwards of $50 or $60 to fill up your tank.
Of course, while rising gas prices mean real pain for our families at the pump, they also mean bigger profits for oil companies. This week, the largest oil companies announced that they'd made more than $25 billion in the first few months of 2011 – up about 30 percent from last year.
    "Now, I don't have a problem with any company or industry being rewarded for their success. The incentive of healthy profits is what fuels entrepreneurialism and helps drives our economy forward. But I do have a problem with the unwarranted taxpayer subsidies we've been handing out to oil and gas companies – to the tune of $4 billion a year. When oil companies are making huge profits and you're struggling at the pump, and we're scouring the federal budget for spending we can afford to do without, these tax giveaways aren't right. They aren't smart. And we need to end them. . .
    ". . .instead of subsidizing yesterday's energy, we should invest in tomorrow's – and that's what we've been doing. Already, we've seen how the investments we're making in clean energy can lead to new jobs and new businesses. I've seen some of them myself – small businesses that are making the most of solar and wind power, and energy-efficient technologies; big companies that are making fuel-efficient cars and trucks part of their vehicle fleets. And to promote these kinds of vehicles, we implemented historic new fuel-economy standards, which could save you as much as $3,000 at the pump.

    "Now, I know that in this tough fiscal environment, it's tempting for some in Washington to want to cut our investments in clean energy. And I absolutely agree that the only way we'll be able to afford the things we need is if we cut the things we don't, and live within our means. But I refuse to cut things like clean energy that will help America win the future by growing our economy and creating good-paying jobs; that will help make America more secure; and that will help clean up our planet in the process. An investment in clean energy today is an investment in a better tomorrow. And I think that's an investment worth making. . ."

    Solidifying the Republican position not to support ending the subsidies, Representative James Lankford (R-OK) responded, also on April 30, with the weekly Republican address and stated that the President's plan to hike "taxes by billions of dollars -- will not lower gas prices and would actually make the problem worse." He said, "The President may think he's punishing CEOs of big companies, but his plan will hurt the everyday consumer of energy. . ."

    Representative Lankford said, "Americans are looking for leadership to tackle the rising gas prices, but President Obama has only offered a tax increase on energy and the prospect of reduced supply.  For more than two years, his administration has knowingly increased energy prices by choking off new sources of traditional American energy and smothering our economy in new energy regulations. His latest proposal – hiking taxes by billions of dollars – will not lower gas prices and would actually make the problem worse.
    "In my state, and in many other states, thousands of people depend directly on American energy production for their paychecks. The President may think he's punishing CEOs of big companies, but his plan will hurt the everyday consumer of energy and imperil the jobs of millions of hardworking people in American-based companies. There is a better way. Republicans are focused on expanding all American energy production to help lower costs, reduce our dependence on foreign oil, and create millions of American jobs.
    "Next week, the House of Representatives will begin this process by passing legislation to increase the supply of American energy and create jobs. This legislation is part of our American Energy Initiative – an ongoing effort to lower costs and allow the private sector to create more American jobs. . ."

    Access the President's weekly address (click here). Access the President's video (click here). Access the complete Republican weekly address (click here). [*Energy/OilGas]