Obama acknowledges Bush policies helped US oil production grow

US President Barack Obama said for the first time that policies in George W. Bush’s administration, as well as during his own, led to more domestic crude oil production. But he also repeated his call for Congress to end what he considers tax subsidies for the oil industry in a Mar. 1 speech in New Hampshire.

“One of the reasons our dependence on foreign oil is down is because of policies put in place by our administration, but also our predecessor’s administration,” he told an audience at Nashua Community College.

“And whoever succeeds me is going to have to keep it up,” he continued. “This is not going to be solved by one party; it's not going to be solved by one administration; it's not going to be solved by slogans; it's not going to be solved by phony rhetoric. It's going to be solved by a sustained, all-of-the-above energy strategy.”

In remarks that largely repeated points he made on Feb. 23 at the University of Miami in Florida, the president said that such a strategy requires the right incentives. “And here’s one of the best examples: Right now, $4 billion of your tax dollars—$4 billion—subsidizes the oil industry every year,” he maintained.

“I am asking Congress [to] eliminate this oil industry giveaway right away,” Obama continued. “I want them to vote on this in the next few weeks. Let’s put every single member of Congress on record: You can stand with 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.”

Oil and gas industry associations and other business groups again questioned his characterization of the federal tax code provisions the White House wants to eliminate. “A subsidy is a direct payment of money to a person or business by American taxpayers,” American Petroleum Institute Pres. Jack N. Gerard said on Mar. 1. “The president has it backwards: Our industry pays the government nearly $90 million/day—the biggest contributor of government revenue than any other industry in the United States.”

National Ocean Industries Association Pres. Randall B. Luthi, meanwhile, noted, “While the facts are the facts, it is disingenuous of the president to claim credit for increased production, particularly when that increased production has occurred on private and state lands. The fact remains that his administration has done very little to encourage new future production on federal lands onshore or offshore, and has in fact done more to thwart it.”

Contact Nick Snow at nicks@pennwell.com.

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