President Obama released a letter today addressed to the nation’s top four lawmakers, Harry Reid, Mitch McConnell, John Boehner and Nancy Pelosi, encouraging them to immediately draft legislation to end government subsidies to the oil industry.
The letter pointed out that American families are feeling the pain of surging fuel prices and the need for lawmakers to address the issue immediately.
“The recent steep increase in gas prices, driven by increased global demand and compounded by unrest and supply disruptions in the Middle East, has only added to those struggles,” Obama wrote.
While Obama said there is no “silver bullet” to bring down the cost of fuel in the short term, eliminating unwarranted tax-breaks for oil and gas companies could free up $4 billion per year to invest in alternative energy.
Commodities traders say taking money from oil and gas companies will do only one thing – force companies to pass the cost onto the consumers.
Oil and gas companies continue to face an uphill battle from the Obama Administration when it comes to drilling domestically. Shell Oil is the latest victim of the Environmental Protection Agency (EPA) and will scrap their plans to drill this summer in the Arctic Ocean.
Shell spent five years and roughly $4 billion on their plans only to meet road block after road block from the EPA. Shell paid the government $2.2 billion for the leases only to have the EPA conclude that drilling would be hazardous for people who live in the area. The nearest village is 70 miles off shore and has a population of 245 native Alaskans.
Also a month ago the President came under fire for giving Brazil $2 billion to explore for oil and even said “America will be your best customer.” And more recently the Obama Administration gave Columbia a $2.84 billion loan to expand and build oil refineries in their country.
Obama also claims that CEO’s of the big oil companies stated that high fuel prices means they will make enough profit to invest in domestic exploration and no longer need subsidies.
According to American Petroleum Institute (API) President and CEO Jack Gerard, “It’s no surprise the administration is proposing yet again to raise taxes on the U.S. oil and natural gas industry. But it’s still a bad idea and comes at one of the worst times in our economic history.” He goes on to explain that the industry is among the nation’s largest job creators and pays more than $100 million per DAY in taxes to the government.
Last week the President spoke to more than 1,000 students at elite Georgetown University (one of the most expensive colleges in America) and reminded them of his presidential bid when soaring gas prices help secure a White House victory.
“Remember, it was just three years ago that gas prices topped $4 per gallon…You had all kind of gimmicks and outraged politicians – they were waving their three-point plans for $2 a- gallon gas (drill, baby, drill),” Obama told the students.
Today’s letter reaffirmed Obama’s push for reducing America’s dependence on foreign oil that leaves the U.S. vulnerable to price fluctuations.
“Without a comprehensive energy strategy for the future we will stay stuck in the same old pattern of heated political rhetoric when prices rise and apathy and neglect when they fall again,” Obama said.
The President called on lawmakers to focus on a new energy plan and referred to oil-base fuel as “yesterday’s energy sources,” and the need to “invest in tomorrow’s” 21st century clean energy. “That’s the key to helping families avoid pain at the pump and reducing our dependence on foreign oil,” he finished.
One thing is certain, high fuel prices hurt economically-challenged families who are unable to purchase “the green cars” the President often speaks of as the solution to the energy crisis.
© Copyright 2011 Kimberly Dvorak All Rights Reserved.
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