Energy Industry has Mixed Reaction to Obama Speech

Jan. 25, 2012
Oil and gas groups say Obama's 'stated goal conflicts with record;' alternative energy producers applaud focus on renewables.

Depending on the energy sector, President Obama either hit a home run in his Jan. 24 State of the union address with his commitment to "clean energy" or he set a cautiously optimistic tone for domestic oil and gas development.

American Petroleum Institute President and CEO Jack Gerard reserved some of the harshest criticism for Obama, calling the president's tax plan "something Jimmy Carter would have supported back in the 70s."

"It would raise energy costs, cut energy production, sacrifice jobs and increase imports," Gerard said. "Our industry already pays income taxes at higher effective rates than most other industries."

Obama said it's time to end tax breaks for oil companies.

"We've subsidized oil companies for a century," he said. "That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable and double-down on a clean-energy industry that never has been more promising."

The oil industry has countered that it does not receive unique tax credits or deductions. The industry takes advantage of tax laws that allow it to recover costs and be taxed only on net income, according to the American Petroleum Institute.

However, Obama pushed for clean-energy tax credits in his address and called for incentives to spur energy innovation.

Obama said he would direct his administration to allow renewable-energy development on public land that could power 3 million homes.

The oil and gas industry has criticized Obama for not allowing more drilling on federal land and offshore areas.

The president said in his address he would open more than 75% of the nation's potential offshore oil and gas resources for exploration.

"If the president is serious about creating more jobs and more energy, allow America's oil and natural-gas companies to produce more of our energy at home, and we'll put people to work and deliver more revenue to the government," Gerard said. "That's what the American people want."

The Western Energy Alliance, which represents small, independent oil and natural gas producers throughout the West, lambasted Obama for restrictive policies and rejecting the Keystone XL pipeline project.

"Despite the president's promise of reducing regulations on American businesses, the reality is that his own administration's bureaucracies and broken policies are making energy development in the West increasingly difficult, time consuming and cost prohibitive," said Tim Wigley, Western Energy Alliance president. "It's actually delaying the economic recovery he seeks."

Thumbs Up From Renewables

Novozymes, a Danish producer of enzymes for biofuels, praised Obama's "renewed focus on renewable energy."

"It's proven that homegrown, renewable energy can put steel in the ground, create jobs and power our economy," said Adam Monroe, president of Novozymes North America in a prepared statement. "Working with the president, we can help America become less dependent on foreign oil and a smarter consumer of energy."

Monroe called on the administration to preserve policies, such as the Renewable Fuel Standard, that benefit the biofuels industry.

An organization representing solar energy manufacturers also gave Obama thumbs-up.

"The solar industry looks forward to working with the administration and both Republicans and Democrats in Congress to implement smart policies that creates jobs, enhances American energy security, revitalizes our manufacturing base and keeps solar's momentum going in 2012 and for years to come," the Solar Energy Industries Association said in a prepared statement.

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