In an energy speech Thursday repeating well-honed themes, President Obama sharpened his call for getting rid of what he called "outrageous" and "inexcusable" tax subsidies to oil companies. Like his energy speech at the University of Miami on Feb. 23, this one was on a campus, Nashua Community College, in New Hampshire:
Right now, four billion of your tax dollars subsidize the oil industry every year. Four billion dollars. These are the same companies that are making record profits off of us right now—tens of billions of dollars a year. Every time gas prices go up, and you fill up your car, they make even more.Chances are nil that Congress will dump the tax breaks. A similar effort last year failed in the Democratic-controlled Senate. No way they can pass in the Republican-controlled House. But they are likely to play rather well to many Americans who have been leaning more in a populist direction lately and see tax breaks as incompatible with record oil-company profits and low effective tax rates that some years let oil giants avoid income taxes altogether. Obama has also included the elimination of these subsidies as part of his 2013 budget, with an eye toward saving $40 billion in revenue over the next decade.
Tell me—does anyone really think Congress should give them another four billion dollars this year?
Of course not. That’s outrageous. It’s inexcusable. And I am asking Congress to eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks, so we can put every single Member on record: You can either stand up for the oil companies, or you can stand up for the American people.
In remarks no doubt making many environmental advocates queasy, the President again met head on Republican claims that his policies have stood in the way of increased domestic oil production and contributed to rising oil prices and gasoline prices. The latter, which have risen sharply in the past few months, have sparked concerns among Democrats that Republicans will use them as a cudgel in the November elections.
On the contrary, Obama said—illustrating with a chart showing U.S. oil imports having dropped below 50 percent on his watch—domestic oil production has increased, with a "near-record number of oil rigs operating right now." Millions of additional acres have been opened up for oil and gas exploration. More than 400 drilling permits with new safety rules have been approved since the BP blow-out in the Gulf of Mexico.
He continued his pre-emptive attacks on Republican complaints about his rejection of TransCanada's northern route for the cross-border Keystone XL pipeline. He said the administration has approved many other pipelines, including one between Oklahoma and Texas that is part of TransCanada's original plans for Keystone. All this has created jobs and helped the economy, Obama said.
Against this backdrop of extensive new drilling, however, Obama said, as he has done many times previously, that the United States cannot drill its way out of its dependence on foreign oil since it only contains 2 percent of world reserves and consumes around 20 percent of total annual production.
The president also repeated previous remarks that there is no "silver bullet" in energy. The United States must do everything it can, he said, to increase oil and gas production but also invest in new technologies in wind, solar and fuel-efficient vehicles, among other things.
Remarks as prepared, via email:
Hello, Nashua! Thank you, Mike, for that introduction. I want to also thank the President of Nashua Community College, Lucille Jordan, for hosting us today. I’d like to thank Professor Karl Wunderlich, for the great tour he just gave me. And I’d like to thank your mayor, Donnalee Lozeau, for joining us today.
It is great to be back in New Hampshire. I’m from Chicago, so a little snow wasn’t about to keep me away. We do winter pretty well. And I want to thank you all for making the trek out here. I appreciate it.
I just had a chance to look at some of the cutting-edge work you’re doing in the auto shop here. Earlier this week, I gave a speech to America’s autoworkers, where I said that one reason this country has an auto industry today is because we’re not just building cars again — we’re building better cars; cars that use less oil; cars that go further on a gallon of gas. And in part that’s because of what’s happening at places like Nashua Community College. That’s because of you.
I don’t need to tell you why fuel-efficiency is so important — especially right now. Most of you have filled up your gas tanks in the last week or two. You’ve seen the prices go up almost every day. And you’ve probably already felt the pinch — whether you own a car or a small business. Some of you have no choice but to drive a long way to work, and higher gas prices are like a tax straight out of your paychecks. In the winter, the rising price of oil can also make it more expensive to heat your homes.
Now, I know this is hard to believe, but some politicians are seeing higher gas prices as a political opportunity. You’re shocked, aren’t you? And right in the middle of an election year. Who would’ve thought? Recently, the lead of one news story said, “Gasoline prices are on the rise, and Republicans are licking their chops.”
Licking their chops. I’ll tell you — only in politics do people respond to bad news with such enthusiasm. And you can bet we’ll be hearing more about those magic, three-point plans for $2 gas. Just like we heard about in the last election. Just like we’ve heard about for thirty years. You know the plans I’m talking about: Step one is drill, step two is drill, and step three is keep drilling.
Well, if there’s one thing I know about New Hampshire, it’s that your political bull detector is pretty sharp. You know we can’t just drill our way to lower gas prices. You know there aren’t any quick fixes or silver bullets. If we’re going to take control of our energy future; if we’re going to avoid high gas prices every year, we need an all-of-the-above strategy that develops every source of American energy — not just oil and gas, but wind and solar and biofuels. We need to keep developing the technology that allows us to use less oil in our cars and trucks; in our buildings and factories. That’s the strategy we’ve been pursuing for the last three years, and that’s the only real solution to this challenge.
Already, we’re making progress. And you can see that on the chart behind me. The bar on the left shows that six years ago, 60% of the oil we used was imported. Since I took office, America’s dependence on foreign oil has gone down every single year. In fact, in 2010, it was under 50% for the first time in thirteen years. And we gave one of these handy charts to everyone who came today, so you can impress your family and friends. It makes for a great conversation piece at parties.
Now, one reason our dependence on foreign oil is down is because of policies put in place by our administration and my predecessor’s administration. And whoever succeeds me will have to keep it up. This won’t be solved by one party or administration. It won’t be solved by slogans and phony rhetoric. It will require a sustained, all-of-the-above energy strategy. And no matter what you hear from some folks in an election year, a key part of this strategy over the last three years has been to increase safe, responsible oil production here at home.
Under my Administration, America is producing more oil today than at any time in the last eight years. That’s a fact. Under my Administration, we have a near-record number of oil rigs operating right now — more working oil and gas rigs than the rest of the world combined. That’s a fact. It’s a fact that we’ve opened millions of new acres for oil and gas exploration, and approved more than 400 drilling permits since we put in place new safety standards in the wake of the Gulf oil spill. It’s a fact that we’ve approved dozens of new pipelines, including from Canada. Just this week, we announced that we’ll do whatever we can to help speed the construction of a pipeline in Oklahoma that will relieve in a bottleneck of oil that needs to get to the Gulf — something that will help create jobs and encourage more production.
So we’re focused on American oil production. But here’s the thing — the amount of oil we drill at home doesn’t set the price of gas on its own. That’s because oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East — this time in Iran. When uncertainty increases, speculation on Wall Street can drive up prices even more. So there are short-term factors at work here.
But over the long-term, the biggest reason oil prices will rise is growing demand in countries like China, India, and Brazil. Just think — in five years, the number of cars on the road in China more than tripled. Nearly 10 million were added in 2010 alone. Ten million cars in one year — think about how much oil that requires. And those numbers will only get bigger over time.
So what does this mean for America? It means that anyone who tells you we can drill our way out of this problem doesn’t know what they’re talking about — or isn’t telling you the truth. The United States consumes more than 20% of the world’s oil. But we only have 2% of the world’s oil reserves. That means we can’t just rely on fossil fuels from the last century. We have to keep developing new sources of energy. We have to keep developing new technology that helps us use less energy. We have to keep relying on the American know-how and ingenuity that comes from places like Nashua Community College. That’s our future. And that’s exactly the path we’ve been taking these last three years.
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 safely develop a near hundred-year supply of natural gas — 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. And after three decades of inaction, we put in place fuel economy standards that will make sure our cars average nearly 55 miles per gallon by the middle of the next decade — nearly double what they get today. That means you’ll be able to fill up your car every two weeks instead of every week — something that, over time, will save the typical family more than $8,000 at the pump. And it means this country will reduce our oil consumption by more than 2 million barrels a day.
But now we have to do more. Now we have to act even faster. We have to keep investing in the development of every available source of American-made energy. And this is a question of where our priorities lie. This is a choice that we face.
First, while there are no short-term silver bullets when it comes to gas prices, I’ve directed my administration to look for every single area where we can make an impact and help consumers, from helping to relieve bottlenecks like the one in Oklahoma to what’s going on in the oil markets. And we will keep announcing as many steps as we can in the coming weeks.
But over the long term, an all-of-the-above energy strategy requires the right incentives. And here’s one of the best examples. Right now, four billion of your tax dollars subsidize the oil industry every year. Four billion dollars. These are the same companies that are making record profits off of us right now — tens of billions of dollars a year. Every time gas prices go up, and you fill up your car, they make even more.
Tell me — does anyone really think Congress should give them another four billion dollars this year?
Of course not. That’s outrageous. It’s inexcusable. And I am asking Congress to eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks, so we can put every single Member on record: You can either stand up for the oil companies, or you can stand up for the American people. You can keep subsidizing a fossil fuel that’s been getting taxpayer dollars for a century, or you can place your bets on a clean energy future. So I’m asking everyone here today, and everyone watching at home, to let your Members of Congress know where you stand. Will you do that?
I know where I stand. And I know that most of you agree. That’s why you’re putting your time and your energy into building cars that use less oil — cars that are powered with alternative fuels, like natural gas. That’s why the city of Nashua is purchasing a new fleet of trash trucks that run on natural gas — trucks that will run cleaner, last longer, and be cheaper to fill up. That’s why our administration has offered to help companies that are converting their fleet to fuel-efficient cars and trucks. In fact, since we announced the National Clean Fleets Partnership last year, the companies interested in transitioning their fleets have tripled. And I’m proud to say we’re leading by example. You see, the one thing about the federal government is that we have a lot of cars. And I’ve directed every department and agency to make sure that by 2015, 100% of the vehicles we buy are fuel-efficient cars and trucks.
Nashua, this is our future. This is the ultimate solution to our energy challenge. Some of the clean energy technologies we discover won’t pan out; some companies will fail. But as long as I’m President, I will not walk away from the promise of clean energy. I will not cede the wind or solar or battery industry to China or Germany because some politicians in Washington refused to make the same commitment here in America. With or without this Congress, I’ll continue to do whatever I can to develop every source of American energy, so that our future isn’t controlled by events on the other side of the world.
We may not have a silver bullet to bring down gas prices tomorrow, or reduce our dependence on foreign oil overnight. But what we do have in this country are limitless sources of energy, and a boundless supply of ingenuity and imagination that we can put to work developing that energy. We have you.
It’s the easiest thing in the world make phony election-year promises about lower gas prices. What’s harder is to make a serious, sustained commitment to tackle a problem that may not be solved in one year or one term or even one decade. But that’s the kind of commitment we need right now. That’s what this moment requires.
So we need all of you to keep at it. We need you to work hard. We need you to dream big. We need you to summon the same spirit of unbridled optimism, that bold willingness to tackle tough problems that led previous generations to meet the challenges of their time — to power a nation from coast to coast, to touch the moon, to connect the entire world with our own science and imagination.
That’s what America is capable of. And it is that very history that teaches us that all of our challenges — all of them — are within our power to solve.
So is this one. Solving it will take time and effort. It will require our brightest scientists, our most creative companies, and most importantly, all of us — Democrats, Republicans, and everyone in between — to do our part. But I know it’s within our reach. I know we can do it. And when we do, we will remind the world once more why the United States of America is the greatest nation on Earth. Thank you, God bless you, and God bless the United States of America.