Email
Password
Remember meForgot password?
    Log in with Twitter

article imageObama to expand oil production, industry says ‘positive nuggets’

By Lynn Herrmann     May 14, 2011 in Politics
Washington - President Barack Obama on Saturday called for increased domestic oil and gas production through the extension of existing leases in the Gulf of Mexico and off the Alaskan coast, and for issuing more lease sales in Alaska’s Federal Petroleum Reserve.
The president began his weekly address by noting the economy is improving. “Recently, there have been signs that the economy is picking up steam,” he said in his opening statement. The comment will likely create confusion for some Americans who listened to Newt Gingrich, one of what appears to be many GOP presidential challengers, less than 18 hours earlier label the incumbent as the country’s “most successful food stamp president.”
Obama then said spikes in gas prices are often temporary but his proposed steps “make good sense.” Because gasoline prices have topped more than $4 per gallon across much of the country, he noted “that you could be paying more than $60 to fill up your tank.”
Although some could, many are, and the frustration Americans are feeling has put Washington in an apparent scramble mode as highly orchestrated politics at home and abroad appear to be unraveling.
Prior to the president’s announcement, executives of the top five Big Oil companies told a Senate committee this past week that taking away their $21 billion in tax subsidies was “discriminatory” and “un-American.” Those comments were made despite the fact that Exxon Mobile CEO Rex Tillerson hauled in a $21.5 million compensation package in 2010.
In his weekly address just two weeks ago, Obama said tax breaks for the oil and gas industry, by some estimates as high as $4 billion annually, “aren’t smart” and insisted “we need to end them.”
Pavel Molchanov, an analyst with Raymond James, said: “There is practically nothing that Washington can do that would materially change the price of fuel in this country,” Huffington Post reports, adding that the US consumes about 20 percent of the world’s petroleum while producing just five percent. “Given that imbalance, there is simply no policy shift that could plausibly come from the federal government that can significantly change that dynamic,” he added.
Erik Milito, upstream director of the American Petroleum Institute (API), while acknowledging Obama’s announcement as “a step forward,” is calling for more drilling of shale reserves, the opening of areas off limits to the industry and in return, promising billions of dollars for the government in return.
“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 in a company statement.
API, representing a group of more than 470 oil and natural gas companies, also believes it can help the government reduce the federal deficit, improve the current unemployment situation, and hinted that taking away billions of dollars in tax breaks for the industry would only lead to a decrease in domestic production of oil and gas.
“While the president’s strategy includes a couple of positive nuggets, America has two major issues to deal with – jobs and the deficit.Including increased taxes will lead to a drop in domestic production, domestic jobs, and domestic revenues. The oil and natural gas industry already supports 9.2 million American jobs and with a dedicated approach to domestic energy production, our industry can put more Americans to work and help decrease the deficit,” Milito added in the statement.
House Republicans have recently passed three bills, including two this week, that would allow the expansion and increase of offshore oil and gas production, claiming the measures are designed to decrease the pains Americans are currently feeling at the gas pumps, but have acknowledged such actions won’t come anytime soon.
In March, the president announced a hope of reducing the country’s oil imports by one-third by 2025, stating politicians of “every stripe” have promised the country energy independence but have failed to deliver. “That has to change. We cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again,” he said, according to CBS News.
Today’s proposed action by the president comes after Republicans had accused him of stalling tactics in issuing permits for new offshore drilling after a temporary suspension following last year’s BP oil debacle in the Gulf of Mexico. Six weeks ago, Obama said: “We have to discover and produce cleaner, renewable sources of energy. And we have to do it quickly,” CBS News noted.
The president’s remarks on Saturday, while opening the door for more offshore oil and gas production, could still provide hope for the alternative energy industry, while changing little for an oil and gas stranglehold on the American public. In his closing comments, Obama said: “As a nation, we should be investing in the clean, renewable sources of energy that are the ultimate solution to high-gas prices.  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 noted the investments of increased oil and gas production and the concept that we “should” be investing in renewable energy will “protect the health and safety of our planet.”
More about President obama, Oil and gas, Clean energy, Gas, Alternative energy
More news from
Latest News
Top News