President Obama used his Saturday address to the American public to further mark out his approach to energy policy, despite a retreat in oil prices back below $100/barrel that has taken some of the immediate pressure off the Administration to act.
Along with advocating for the repeal of $4 billion in tax subsidies to oil and gas companies, Obama called for investment in “clean, renewable sources of energy that are the ultimate solution to high gas prices.”
“[The $4 billion tax subsidy] isn’t fair, it makes no sense,” Obama said, emphasizing that the country is currently struggling with a federal deficit and citizens are facing economic hardships.
The President used the same speech to announce the opening of the Alaska Reserve, as well as parts of the mid and south Atlantic, for oil and gas exploration, potentially quelling swelling industry opposition to the end of the tax benefits.
Obama also announced the opening of new leases for exploration in the Gulf of Mexico, an area that has been closed since the Macondo oil drilling platform blowout last spring.
The oil industry remained largely unimpressed by the President’s move.
“Raising energy taxes will do nothing to create jobs, reduce prices, enhance our energy security or increase revenue to our government long term,” said American Petroleum Institute (API) CEO and President Jack Gerard.
“The [speech] was predictable political theater, a distraction aimed at masking past energy policy failures that contributed to the volatile prices consumers are understandably concerned about,” Gerard said.
Gerard called the attack “an uninformed, unmerited assault on some of America’s biggest and most reliable employers.”
“We can address our energy challenges by developing more energy at home,” he said. “That will create jobs and more energy and help strengthen the security of our energy supplies.”
API Upstream Director Erik Milito expressed disappointment with Obama’s announcement of further domestic exploration, calling it a small first step in a much-needed “robust national energy plan.”
“If given access to key shale reserves, if we can get the oil sands pipeline built that will allow us to import more crude from Canadian oil sands, and if we can access areas of the US that are currently off limits, our industry can create over a million new jobs and generate over $194 billion in revenue for the government in the next 15 years,” Milito said.
Obama emphasized alternative sources of power as the key to energy profits.
“That’s why we’re investing in clean energy technology, helping businesses that manufacture solar panels and wind turbines and making sure that our cars and trucks can go further on a tank of gas – a step that could save families as much as $3,000 at the pump,” Obama said. “These are investments worth making.”