“I want American oil companies to do well,” President Obama proclaimed in New Mexico’s Oil Patch recently, then added this caveat: “It doesn’t make sense for us to provide a $4 billion subsidy when oil and gas are doing plenty well on their own.”
That prompted oil and gas people to shake their heads. Another mixed message from a president whose energy policy includes nixing the Keystone XL pipeline and whose energy secretary previously advocated for Europe-sized gasoline prices to force less consumption.
Last week, Obama challenged Congress to end what he calls tax breaks for Big Oil companies, noting they are raking in record profits. But the same day, Senate Republicans — with the help of four Democrats —rejected a bid to eliminate $2 billion in tax incentives.
Industry leaders are skeptical that eliminating the incentives will lower gasoline prices, up about 19 percent this year and hovering close to $4 a gallon.
U.S. oil and gas production is booming, so high gas prices are a puzzle to cost-conscious Americans. U.S. Sen. Jeff Bingaman, D-N.M., recently noted that gasoline prices are influenced by a number of world factors unrelated to U.S. oil supplies.
The president claimed credit for opening up millions of federal acres to drilling, and Bingaman credited the administration for boosting domestic production and lessening U.S. dependence on imports. But some industry leaders say the real reasons for robust production lie with $100-a-barrel crude, new extraction technology and decisions made before Obama took office.
Obama will be hard pressed to make the case that ending tax credits for Big Oil will lower gas prices. In fact, it may end up raising them. His claim that redirecting tax dollars to renewable energy projects will make a difference in gas prices or energy independence is nonsense. While developing renewable sources should remain a priority, abundant fossil fuels will continue to be the primary fuel source for decades.
Obama’s message is a jumble of metaphors in an attempt to deflect attention from his unpopular stance on energy and to direct more resources to sources he favors. But scrambling to shore up an incoherent policy isn’t going to make gasoline prices go down in the short term, or make voters happier in November.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.