President Obama’s proposal to end federal subsidies to oil companies has nothing to do with rising gas prices, but is a matter of "fairness," administration officials said Monday.
"I think from our perspective, it’s a fairness issue," Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, told reporters. "At this point in time when we’re making difficult decisions about the budget and where to make investments and where to cut, the fact that oil and gas companies are bringing in record profits and at the same time getting $4 billion in subsidies annually, those subsidies should be repealed."
At time of record high gas prices, the president has called on Congress to eliminate nearly $4 billion in annual subsidies to oil and gas companies.
During a speech in Miami last month, Obama appeared to suggest that doing so would help reduce Americans’ pain at the pump.
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 in the months ahead, from permitting to delivery bottlenecks to what’s going on in the oil markets. And we will keep taking 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. Right now, four billion of your tax dollars subsidize the oil industry every year. Four billion dollars. These are the same oil companies that have been making record profits off the money you spend at the pump. And now they deserve another four billion dollars from us?
The president has made a concerted effort in recent weeks to beat back criticism that his administration’s energy policy (or lack thereof) is to blame for record gas prices.
However, the administration’s actions raise doubts as to whether the White House is doing everything it can to address rising fuel prices.
Obama has on more than one occasion stood in the way of approval for the construction of the Keystone XL pipeline that would send oil from northwest Canada to the Gulf Coast in Texas.
Energy Secretary Steven Chu recently said in testimony before Congress that lowering gas prices was not the administration’s goal.
Full transcript:
MARA LIASSON: The president often says there’s no silver bullet to bring gas prices down in the short-term, but he has called on Congress to do away with subsidies for oil and gas companies. Do you guys have some kind of estimate of how, if those subsidies were gone, it would affect prices at the pump? Or is it just a fairness issue?
HEATHER ZICHAL: I think, from our perspective, it’s a fairness issue. At this point in time, when we’re making difficult decisions about the budget, and where to make investments and where to cut, the fact that oil and gas companies are bringing in record profits and, at the same time, getting $4 billion in subsides annually, those subsidies should be repealed. The president has called for that, and I believe the Senate will be acting soon to vote on this issue, as well.
LIASSON: And he’s not arguing that there would be some kind of connection between that and the prices going down?
ZICHAL: Correct.