Obama to urge Congress to give oil tax credits to ‘green energy’ companies

Paul Conner Executive Editor
Font Size:

In his first public statements since returning from South Korea, President Barack Obama urged Congress to end “big oil” tax credits and give that money to “green energy” companies.

Obama made the plea to lawmakers on Thursday morning in the Rose Garden at the White House as part of his effort to double down on his administration’s much-criticized investments into clean energy.

This week, the Senate has been debating a bill sponsored by Sen. Robert Menendez, a Democrat from New Jersey, that would do exactly what Obama wants — end $21 billion in tax breaks over ten years to BP, Exxon, Shell, Chevron and ConocoPhillips. About half of that money would be redirected to plug-in vehicles, biodiesel, wind energy and home weatherization. The rest would go toward deficit reduction.

“This money can be better spent promoting domestic manufacturing, encouraging the development of clean energy technologies that will reduce our dependence on oil, and cutting the deficit,” the White House said in a statement supporting the Menendez bill.

Unfortunately for the White House, the Senate voted to end debate on the bill 51 to 47.

Critics claim the bill could have raised gas prices as the oil companies would be forced to make up for the lost money.

“[Ending the tax breaks] could increase the price of gas because it could potentially drive business elsewhere, or companies that want to take risks out in the oil patch may be less inclined to do so,” said Tom Pyle, president of the Institute for Energy Research. “It’s just an effort to change the subject.” (RELATED: Obama’s campaign push for biofuels evokes Carter’s 1980 State of the Union)

Even two Democratic senators and a former Obama Treasury official agree that ending the tax incentives for the five big oil companies would do nothing to bring down gas prices. The president, who has proposed ending the tax breaks in his past three budgets, began pushing the idea again in mid-March as gas prices soared across the country.

“Your member of Congress should be fighting for you. Not for big financial firms. Not for big oil companies,” Obama said in his March 17 weekly address.

“We’re going to put every single member of Congress on record: They can either stand up for oil companies, or they can stand up for the American people,” he continued.

Senate Republicans pushed back on the proposal as irrelevant to lowering gas prices.

“At a time when gas prices are at a national average of nearly $4 a gallon, this is what passes for a response to high gas prices for Washington Democrats — a bill that does nothing about it,” Senate Minority Leader Mitch McConnell told CNN Wednesday.

The administration’s forays into clean energy have not exactly been roaring successes. Chevrolet has suspended production of its plug-in Volt until April 23 amid lagging demand for the car backed by tax incentives. Solyndra, a company that received $535 million loan guarantee from the Department of Energy, famously went bankrupt amid reports that the administration fast-tracked the loan in exchange for political donations and for a predetermined deadline.

“These things have been subsidized for decades,” Pyle said of alternative energy sources. “We keep hearing that they are just around the corner, that it’s never been more promising. That’s simply not true. We get two percent of our energy from wind and solar, and that’s way up over the last several years.”

Follow Paul on Twitter