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Obama's Energy Budget: Misplaced Subsidies, Overlooked Benefits

issue brief

Obama's Energy Budget: Misplaced Subsidies, Overlooked Benefits

February 19, 2012
Energy & EnvironmentOther

When it comes to energy, the Obama administration consistently promotes subsidies for “clean” energy technologies while accusing the oil-and-gas industry of benefitting from excessive taxpayer support. But in setting its policy priorities, the administration overlooks some important facts: subsidies for the oil and gas sector aren’t all that big when compared to the amount of energy being produced; the vaunted “green” economy is not creating large numbers of jobs; and tens of thousands of jobs are being created by the oil-and-gas industry.

Indeed, recent advances in the technologies used for oil and gas exploration are saving the U.S. economy hundreds of millions of dollars per day, creating lots of high-paying jobs, decreasing the need for foreign oil, and spurring manufacturing growth, which is leading to billions of dollars of new investment (and even more jobs). Yet, the Obama administration is using its fiscal year 2013 budget to bash the oil and gas sector. Worse, the administration continues to insist that “clean energy” will drive America’s future competitiveness.

The Obama administration is ignoring the essentiality of domestic oil and gas production, and they are doing so at a time when gasoline prices are spiking because of the specter of a military strike against Iran — some analysts are predicting a national average gasoline price of $4 or more by April.[1] Despite these realities, the budget extols the benefits of “energy independence” and the administration wants to eliminate a relatively minor set of tax preferences for the oil-and-gas sector that are helping the U.S. attain record production levels.

To be clear, all energy sources should be forced to compete, fair field, no favor. Let’s eliminate all energy subsidies. But if that were to occur, the wind and solar industries would immediately go into cardiac arrest while oil, gas, and coal would continue to dominate our energy mix.