He said, ". . .we've got to have an all-of-the-above strategy that develops every single source of American energy. Not just oil and gas, but also wind and solar and biofuels. We've got to keep developing the technology that allows us to use less oil in our cars and trucks, less oil in our buildings and our factories. And that's the strategy we've been pursuing for the last three years, and it's the only real solution to this challenge. . .
"Since I took office, America's dependence on foreign oil has gone down every single year. Every single year. In fact, in 2010, it was under 50 percent for the first time in 13 years -- for the first time. . . one of the reasons our oil -- our dependence on foreign oil is down is because of policies put in place by our administration, but also our predecessor's administration. And whoever succeeds me is going to have to keep it up. This is not going to be solved by one party; it's not going to be solved by one administration; it's not going to be solved by slogans; it's not going to be solved by phony rhetoric. It's going to be solved by a sustained, all-of-the-above energy strategy. . .
"So when you start hearing a bunch of folks saying somehow that there's some simple solution, you can turn a nozzle and suddenly we're going to be getting a lot more oil, that's not just how it works. Over the long term, the biggest reason oil prices will rise is because of growing demand in countries like China and India and Brazil. Just think about this. In five years, the number of cars on the road in China more than tripled. Over the last five years, the number of cars tripled. Nearly 10 million cars were added in China alone in 2010 -- 10 million cars just in one country in one year. So that's using up a lot of oil. And those numbers are only going to get bigger over time. As places like China and India get wealthier, they're going to want to buy cars like we do, and they're going to want to fill them up like we do, and that's going to drive up demand. . .
"We have to keep developing new technology that helps us use less energy. . . Because of the investments we've made, the use of clean, renewable energy in this country has nearly doubled -- and thousands of Americans have jobs because of it. We're taking every possible action to develop a near 100-year supply of natural gas, which releases fewer carbons. Now that's something that experts believe will support more than 600,000 jobs by the end of the decade. Our cooperation with the private sector has positioned this country to be the world's leading manufacturer of high-tech batteries that will power the next generation of American cars. . .
"But over the long term, an all-of-the-above strategy requires the right incentives. And here's one of the best examples. Right now, $4 billion of your tax dollars -- $4 billion -- subsidizes the oil industry every year. . . Now, these companies are making record profits right now -- tens of billions of dollars a year. . . It's outrageous. It's inexcusable. And I am asking Congress -- eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks. (Applause.) Let's put every single member of Congress on record: You can stand with the oil companies, or you can stand up for the American people. . .
"With or without this Congress, I'm going to continue to do whatever I can to develop every source of American energy -- to make sure that three years from now our dependence on foreign oil is even lower, to make sure that our future is not controlled by events on the other side of the world. . . The easiest thing in the world is to make phony election-year promises about lowering gas prices. But what's harder is to make a serious, sustained commitment to tackle a problem that we've been talking about for 30 years and has not been tackled, has not been solved. . ."
The American Petroleum Institute (API) President and CEO Jack Gerard responded to the president's call for a vote to "raise taxes on the oil and natural gas industry." He said, "It is factually wrong for the president to say that the industry receives 'subsidies.' A subsidy is a direct payment of money to a person or business by American taxpayers. The president has it backwards, our industry pays the government nearly 90 million dollars a day -- the biggest contributor of government revenue than any other industry in the United States." API release a detailed explanation why oil and gas tax treatments are not unique or "subsidies." API indicates that, "Contrary to what some in politics and the media have said, the oil and natural gas industry currently enjoys no unique tax credits or deductions. Since its inception, the US tax code has allowed corporate tax payers the ability to recover costs and to be taxed only on net income. These cost recovery mechanisms, also known in policy circles as 'tax expenditures', should in no way be confused with 'subsidies', i.e., direct government spending."
"And, as we all know, he flatly rejected the Keystone XL Pipeline -- a potentially game-changing domestic energy project that promises not only greater independence from Middle Eastern oil, but tens of thousands of private sector jobs. All these policies help drive up the cost of gasoline and increase our dependence on foreign sources of oil. But perhaps none is as emblematic of the President's simplistic and punitive approach to energy policy as the last one. The President simply can't claim to support comprehensive approach to energy while at the same time standing in the way of the Keystone Pipeline. It's one or the other. Americans know that.
"And that's why many of us were pleased when the company that's responsible for building Keystone said it plans to move forward with the southern portion of the pipeline, despite the administration's decision to block the northern portion, to alleviate a bottleneck in Cushing, Oklahoma. They're just not going to let this administration punish them or the rest of those who want to build this pipeline. Asked about the impact of delays, the company's President and CEO said they were partly to blame for the recent spike in gas prices, which is presumably why the White House came out in support of the move. But the hypocrisy here is stunning. . ."
Karen Harbert, president and CEO of the U.S. Chamber's Institute for 21st Century Energy, issued a statement responding to comments from Senate Majority Leader Harry Reid (D-NV) that he would bring up legislation to address oil company tax treatment and subsidies in the near future [See WIMS 2/22/12]. She said, "It is time for responsible rhetoric from lawmakers and the president on oil and gas taxes. Raising taxes on oil and gas is good news for America's foreign competitors and bad news for America's families and businesses.
"According to a Wood McKenzie study, tax increases of the magnitude proposed by the president will cost America 170,000 jobs and result in a 14% decrease in energy production. This should be no surprise, because our nation saw a sharp increase in imports and a downturn in our economy when Congress imposed a similar scheme in 1980. It is irresponsible to punitively single out the oil and gas industry. Punishing energy producers will do nothing to lower gas prices nor is it a substitute for a real energy policy. The administration and Congress would be much better served spending time on actual solutions to our energy problems, such as making some of the 95% of onshore and offshore lands that are currently blocked for exploration available for energy production and building the Keystone XL pipeline."
Access the full text of the President's speech (click here). Access a release from API and link to the 2-page detail on oil and gas tax treatments (click here). Access the Floor speech of Senator McConnell (click here). Access the statement from the U.S. Chamber and link to the McKenzie study (click here). [#Energy]
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