Friday, May 06, 2011

President Obama Takes Energy & Oil Subsidy Issues To Indiana

May 6: Speaking to the to workers at Allison Transmission Headquarters in Indianapolis, Indiana, President Obama said, "Today there are more than 3,800 buses using hybrid technology all over the world -– buses that have already saved 15 million gallons of fuel. And pretty soon, you'll be expanding this technology to trucks as well.  And that means we'll have even more vehicles who are using even less oil.  That means more jobs here at Allison.  Last month, you added 50 jobs at this company and I hear that you plan to add another 200 over the next two years.  So we are very proud of that.  We are very happy about that. This is where the American economy is rebuilding, where we are regaining our footing. . ."
    He stressed that just today the latest jobs report indicated that another 268,000 private sector jobs were added in April. He said, "So that means over the past 14 months, just in a little bit over a year, we've added more than 2 million jobs in the private sector." Despite the good news he said, ". . .people are thinking, where are those new jobs going to come from, that pay well, have good benefits, can support a family? And how do we finally reduce our dependence on oil so that we're not hostage to high gas prices all the time?

    "The reason I'm here today is because the answers to these questions are right here at Allison, right here in these vehicles, right here in these transmissions.  This is where the jobs of the future are at.  We're going to have a lot of jobs in the service sector because we're a mature economy, but America's economy is always going to rely on outstanding manufacturing, where we make stuff -- where we're not just buying stuff overseas, but we're making stuff here, and we're selling it to somebody else.  And that's what Allison is all about. 

    "This is also where a clean energy economy is being built.  This is the kind of company that will make sure that America remains the most prosperous nation in the world.  See, other countries understand this.  We're in a competition all around the world, and other countries -- Germany, China, South Korea -- they know that clean energy technology is what is going to help spur job creation and economic growth for years to come. And that's why we've got to make sure that we win that competition.  I don't want the new breakthrough technologies and the new manufacturing taking place in China and India.  I want all those new jobs right here in Indiana, right here in the United States of America, with American workers, American know-how, American ingenuity. . .
   ". . .in the short term, we still need to do everything we can to encourage safe and responsible oil production here at home.  In fact, last year, American oil production reached its highest level since 2003.  So I want everybody to remember that if people ask -- because sometimes I get letters from constituencies saying, why aren't we just drilling more here?  We're actually producing more oil here than ever.  But the challenge is we've only got about 2 to 3 percent of the world's oil reserves and we use 25 percent of the world's oil. So we can't just drill our way out of the problem. If we're serious about meeting our energy challenge we're going to have to do more than drill. . .
    The President outlined the many alternative and green energy initiatives that are currently underway and said, "Of course, these investments in clean energy do cost some money, and we're going to need to find a way to pay for them. Part of the cost can be made up by putting an end to the unwarranted subsidies that we are giving oil companies right now through the tax code. I want everybody to listen here. Oil companies over the last five years, through a recession, through ups and downs, the top five oil companies, their profits have ranged between $75 billion and $125 billion. That's with a B -- not million; billion. And yet, they still have a tax loophole that is costing taxpayers $4 billion every year. Now, if you're already paying them at the pump, we don't need to pay them through the tax code. We do not need to do it. Especially at a time when we're scouring every part of the budget to try to figure out how we bring down our deficit and our debt. . .
    He concluded by saying, "I know that in this difficult fiscal climate, it may be tempting for some people to say let's stop investing in hybrid technology; let's stop investing in basic research; let's stop investing in the infrastructure that's needed to make sure that we can transition to new forms of transportation. That's the temptation. But I profoundly disagree with that approach. If we're going to win the future, we've got to cut out the things we don't need, but still make investments in the things that we do. . ." He said that's what people do at home. Even in hard times, they have to invest in the most important things -- He said, "Those are the things -- that's like your seed corn. You don't eat that."
    Despite the President's strong position to end the oil company tax credits, Republicans say removing the credits/subsidies is in effect a tax hike. On May 5, House Speaker John Boehner (R-OH) reiterated the Republican position on the FY 2012 budget and the upcoming vote to raise the national debt ceiling. He said, ". . .we will not increase the debt limit without real spending cuts and budget reforms," and added that when it comes to tackling our spending-driven debt crisis, "nothing is off the table except raising taxes." Boehner said "raising taxes will hurt our economy and hurt job creation in our country."
    In the meantime, Speaker Boehner and Representative Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee both issued releases praising the House passage yesterday of H.R.1230, the Restarting American Offshore Leasing Now Act, with a "bipartisan vote" of 266 to 149 (33 Democrats supported) [See WIMS 5/5/11]. Introduced by Natural Resources Committee Chairman Doc Hastings (R-WA), H.R. 1230 requires the Secretary of the Interior to conduct oil and natural gas lease sales in the Gulf of Mexico and offshore Virginia that have been delayed or cancelled by the Obama Administration.
    Speaker Boehner said, ". . .the House has voted to restart job-creating energy projects the Obama Administration has either delayed or canceled.  The very need for legislation to move forward on projects that have already been approved shows just how far behind Washington is when it comes to expanding American energy production.  Unfortunately, the Administration remains fixated on raising taxes, which would only drive up prices further and push our economy backwards. . ."
    Representative Upton said, ". . . What happens when the production goes down and the demand goes up? The price goes up -- way up. Add to that the uncertainty and unrest in the Middle East, and there is no surprise that we have gas prices at $4 and $5 now in this country, and who knows where they are headed. This legislation. . . helps turn the key to unlocking the door on domestic energy production. This legislation is not about new lease sales, it simply catches up with the leases already approved." Upton supports an "all of the above" energy strategy, "a commonsense approach to meeting our nation's growing energy needs through the development of domestic energy resources, a renewed commitment to safe nuclear power, and the utilization of renewable and alternative energy technologies."

    Representative Ed
Markey (D-MA), Minority Leader Nancy Pelosi (D-CA) and Representative Tim Bishop (D-NY) held a press conference on the House vote on "tax payer subsidies to big oil companies and rising gas prices." Rep. Markey said in a separate release, "Republicans passed the first part of their 'Oil Above All' energy plan today that will make oil drilling less safe, while protecting billions in tax breaks for the largest oil companies. The bill passed today would use shoddy, pre-BP-spill environmental review to accelerate drilling lease sales already scheduled by the Obama administration, and would open up new areas off Virginia's beaches to new drilling."
    Markey indicated that the Democratic energy package would "fight back against price gouging and close oil company loopholes that would cost taxpayers up to $53 billion. The bill would also end tax breaks for oil companies, of which the five largest earned more than $35 billion in profits in the first three months of 2011." He said, "Republicans want to keep grandfathering in tax breaks for the most profitable companies in the world, while cutting the funds to help grandma with her prescriptions," said Rep. Markey, the Ranking Member of the Natural Resources Committee, from which these bills originated. "Republicans are playing favorites with an industry that does the American people no favors by continuing to protect tax breaks. Republicans are paying for these tax breaks for oil companies by erecting a drilling rig on the Medicare program, poking holes in our nation's safety net for seniors." 

    Access the full text of the President's comments in Indiana (click here). Access Speaker Boehner's comments and video (click here). Access the Speaker's statement on H.R.1230 (click here). Access Rep. Upton's statement on H.R.1230 (click here). Access the Democrats press conference transcript (click here). Access a release from Rep. Markey with additional details on amendments that were rejected on H.R.1230 (click here). Access a release from Rep. Hastings with a brief summary of the legislation (click here). Access legislative details for H.R.1230 including the roll call vote (click here). [*Energy/OilGas, *Energy/Tax]