Crude prices fell from their…
Crude oil prices could fall…
Obama has proposed that Congress should kill tax breaks for the oil and gas industry … again. He failed to end the subsidies when the Democrats controlled congress, so it is unlikely he will have any more success persuading Republicans, who fear that the loss of the tax breaks will lead to even higher fuel prices.
Tax subsidies for oil and gas companies amount to about $4 billion and Obama hopes that this money could instead be used to develop alternative energy sources. He said that the vote will prove whether congress will “stand up for oil companies” or “stand up for the American people.”
“They can either place their bets on a fossil fuel from the last century or they can place their bets on America's future,” Obama said.
Obama has received criticism from Republican presidential candidates that he has purposefully hindered the oil and gas industry by delaying drilling in the Gulf of Mexico and Alaska, and by blocking the approval of the Keystone XL pipeline. His intention to remove the tax subsidies will be seen as another blow to the industry, which could prove costly leading up to the presidential elections. However, Obama has stated that these claims are false. That the US is currently producing more oil than at any time in the past eight years, and that the number of oil rigs has quadrupled.
Obama says he is focussing on wind, solar, and biofuels, along with other clean technologies, in order to reduce his nation’s dependence reliance on oil, and avoid volatile spikes in price. “If we're truly going to make sure we're not at the mercy of spikes in gas prices every year, the answer isn't just to drill more; because we're already drilling more.”
Whilst his intentions are good, his methods are letting the president down. His $800 billion spending to stimulate research and development in clean energy technology has largely been a waste of taxpayer’s money according to Republican Cory Gardner, R-Colo.
"After spending money we don't have on what won't work, and overregulating what would, is it any wonder gas prices have more than doubled on the president's watch? Make no mistake, high gas prices are a symptom of his failed 'stimulus' policies," Gardner said.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com