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Obama Seeks to End Subsidies for Oil and Gas Companies

(Photo: Pete Souza / White House)


Obama Seeks to End Subsidies for Oil and Gas Companies

(Photo: Pete Souza / White House)

Nashua, New Hamshire – With his re-election fate increasingly tied to the price Americans are paying at the gas pump, President Obama asked Congress on Thursday to end $4 billion in subsidies for oil and gas companies and vowed to tackle the country’s long-term energy issues while shunning “phony election-year promises about lower gas prices.”

Mr. Obama, in an appearance at Nashua Community College here, took a page out of his jobs strategy of last year, calling on Americans to contact their Congressional representatives and demand a vote on the oil subsidies in the next few weeks.

“You can either stand up for the oil companies, or you can stand up for the American people,” Mr. Obama said. “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.”

The president criticized Republicans who have called for the country to increase its own oil production, declaring that “anyone who tells you we can drill our way out of this problem doesn’t know what they’re talking about.” With the United States consuming more than 20 percent of the world’s oil while having only 2 percent of the world’s oil reserves, Mr. Obama said “we can’t rely on fossil fuels from the last century.”

Calling for renewed investment in alternative energy, he vowed to make a “serious, sustained commitment to tackle a problem that may not be solved in one year or one term or even one decade.”

Mr. Obama’s decision to spotlight his proposal to end oil and gas subsidies immediately opened him up to criticism from Republicans, who noted that the proposal was unlikely to help lower the price of gas at the pump. The office of the House speaker, John A. Boehner, sent an e-mail to reporters citing an analysis by the Congressional Research Service last March that found that ending the subsidies could make oil and natural gas more expensive.

Mr. Boehner also told reporters that after meeting with Mr. Obama at the White House on Wednesday, it did not appear that the president would support tapping into the Strategic Petroleum Reserve as a way to curb rising gas prices.

“It didn’t appear to me that the president believes using S.P.R. would have any meaningful effect on gas prices,” Mr. Boehner said.

The oil reserve was created four decades ago to help the country deal with emergencies in oil supply.

Jay Carney, the White House press secretary, declined to say whether the president would tap into the reserves if gas prices continued to rise. Speaking to reporters aboard Air Force One en route to New Hampshire, Mr. Carney maintained that the president was fixed on long-term solutions to the country’s oil dependence. Mr. Carney said oil companies “do not deserve and do not need” subsidies or tax breaks financed by taxpayers. He described the president as “very concerned” about the impact the spike in gas prices is having on American families.

Mr. Obama’s political advisers are concerned as well, and have indicated privately that Mr. Obama would have a tough time winning re-election if the price at the pump reached or exceeded $5 a gallon.

In New Hampshire on Thursday, Mr. Obama chided Republicans who he said were hoping to gain political advantage from the rise in oil prices. “Now I know this is hard to believe, but some politicians are seeing higher gas prices as a political opportunity,” Mr. Obama said. “You’re shocked, aren’t you? And right in the middle of an election year. Who would’ve thought?”

“Only in politics do people respond to bad news with such enthusiasm,” he said.

Appearing in North Dakota on Thursday, one of Mr. Obama’s Republican challengers, Mitt Romney, said the president was out of touch. North Dakota has benefited from the discovery of the Bakken Shale, an oil-rich deposit.

“Today the president is going to be in New Hampshire talking about energy in North Dakota,” Mr. Romney said. “He’s about as far away from North Dakota as he can get and still be in the United States. His idea of course is to be far enough away from the people who know what’s really going on right here to maybe try and blow one past folks.”

Republicans in Congress, struggling to regain their message as the economy improves, have latched on to rising oil prices and lobbed new accusations of culpability at the White House almost every day this week. But neither Republicans nor Democrats have been able to get legislative traction on their proposed solutions.

House Republican leaders tried to pay for a major transportation and infrastructure bill with receipts from federal lands they would open to oil drilling, but that legislative move appears to have collapsed. They continue to press the Obama administration to approve an oil pipeline that would stretch from Canada to the Gulf of Mexico.

“We are seeing some positive economic news, but it is being overshadowed for many families by soaring oil costs,” Mr. Boehner said on Thursday, as he pressed the president to issue more oil leases in offshore areas and to hasten oil drilling permits.

For their part, Democrats blame speculators for the spike in oil prices, but efforts to mandate a review by the Federal Trade Commission have not gotten far, and the party is divided on whether to press for the release of oil from the Strategic Petroleum Reserve.

Largely absent from the partisan bickering has been the role tensions over Iran have played in the price rise.

Helene Cooper reported from Nashua, and Jonathan Weisman from Washington. Ashley Parker contributed reporting from Fargo, N.D.

This article, “Obama Seeks to End Subsidies for Oil and Gas Companies,” originally appeared in The New York Times.

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