Obama's Oil Plan

Lays out strategy to increase U.S. oil production; GOP passes its own energy legislation

WASHINGTON -- High oil prices and their effect on retail gasoline prices continued to dominate President Barack Obama's weekly address on Saturday, as they have for the last few weeks. He laid out his strategy to expand responsible and safe domestic oil production, leveraging existing authorities as part of his long-term plan to reduce the nation's reliance on foreign oil.

"Without a doubt, one of the biggest burdens over the last few months has been the price of gasoline.... While there are no quick fixes to the problem, there are a few steps we should take that make good [image-nocss] sense," Obama said.

"First, we should make sure that no one is taking advantage of consumers at the pump," he said. "That's why we've launched a task force led by the Attorney General that has one job: rooting out cases of fraud or manipulation in the markets that might affect gas prices, including any illegal activity by traders and speculators."

(Click here for previous CSP Daily News coverage of the task force.)

"Second, we should increase safe and responsible oil production here at home," he said. "Last year, America's oil production reached its highest level since 2003. But I believe that we should expand oil production in America--even as we increase safety and environmental standards."

To meet the second goal, the President is directing the Department of the Interior to conduct annual lease sales in Alaska's National Petroleum Reserve while respecting sensitive areas, to speed up the evaluation of oil and gas resources in the mid and south Atlantic and to create new incentives for industry to develop their unused leases both on and offshore.

Also, to give companies more time to meet higher safety standard for exploration and drilling, the administration is extending drilling leases in areas of the Gulf of Mexico that were impacted by the moratorium, as well as certain leases off the coast of Alaska. And, he is establishing a new interagency working group to ensure that Arctic development projects meet health, safety and environmental standards.

The President also said, " Finally, the third step we should take is to eliminate the taxpayer subsidies we give to oil and gas companies.... Next week, there is a vote in Congress to end these oil company giveaways once and for all. And I hope Democrats and Republicans come together and get this done. The American people shouldn't be subsidizing oil companies at a time when they're making near-record profits. As a nation, we should be investing in the clean, renewable sources of energy that are the ultimate solution to high gas prices."

Last week, Major Oil executives including ExxonMobil CEO Rex Tillerson, ConocoPhillips CEO Jim Mulva, Shell Oil Co. U.S. president Marvin Odum, BP America chairman Lamar McKay and Chevron CEO John Watson testified at a Senate Committee on Finance hearing entitled Oil & Gas Tax Incentives & Rising Energy Prices (click here for previous coverage and to watch a video replay of the hearing).

Delivering the Republican response to Obama's weekly address, Rep. Martha Roby (R-Ala.), said, "I can't begin to tell you how many times I've gone to the grocery store and found myself in a conversation about the price of gas, the cost of going to the doctor, or about how hard it is to get a business going and keep jobs in our area. The sad conclusion of these conversations is that Washington is a part of the problem. It is failing to promote policies that will put our economy on a path to prosperity."

She added, "The price of gas is a good example, and a timely one too. Year after year, politicians in Washington talk about steps to ease the pain at the pump, but they never act. It hit home this spring when the president promoted Brazilian-made energy in Brazil while his administration keeps our resources here at home under lock and key. I am pleased to report the House has passed several measures designed to expand domestic energy production to help address the soaring gas prices. This is also important because when we're talking about energy, we're talking about jobs. The cost of energy is directly related to the cost of hiring workers and running a business."

A spokesperson for Speaker of the House John Boehner (R-Ohio) told ABCNews, "The President just conceded what his party on Capitol Hill still denies: more American energy production will lower costs and create jobs. This reversal is striking, since his Administration has consistently blocked American-made energy. The policy changes he announced are not terribly substantial, but should pave the way for legislation--like the bills the House passed in the past two weeks--to reduce the damage from the restrictions he imposed in the past."

Boehner praised the House for passing two pieces of "American Energy Initiative" (click here to view the initiative's Facebook page) legislation last week--the Putting the Gulf Back to Work Act (H.R. 1229) and the Reversing President Obama's Offshore Moratorium Act (H.R. 1231)--each designed to address rising gasoline prices and create new American jobs.

"These bills...will end the Obama Administration's de facto moratorium on offshore energy production, help put thousands of Americans back to work, and reduce our dependence on foreign energy. On the other side of the Capitol, Senate Democrats debated a tax hike backed by the White House that some in their own party admit 'won't lower gasoline prices by one penny.' Republicans are focused on solutions that create a better environment for private-sector job growth and provide much-needed relief to families and small businesses struggling with high prices at the gas pump. Raising taxes and imposing new barriers to job growth will do neither; increasing the supply of American energy and stopping policies that drive up prices will."

Previously, the House passed the Restarting American Offshore Leasing Now Act (H.R. 1230) to help address soaring gasoline prices and create new jobs by moving forward on energy projects it said the Obama Administration has either delayed or canceled. And in April, the House approved the Energy Tax Prevention Act (H.R. 910), legislation aimed at stopping the U.S. Environmental Protection Agency (EPA) from imposing a "cap and trade" national energy tax.

Meanwhile, American Petroleum Institute (API) upstream director Erik Milito said President Obama's weekly address could have gone further to capitalize on the opportunities available for American energy production, jobs and economic growth.

"The President has acknowledged the need to increase environmentally sound oil production here in the United States," said Milito. "While this is a step forward for the national discourse on America's energy future, we hope that these proposals are only the first in a series towards a more robust national energy plan."

He added, "While the president's strategy includes a couple of positive nuggets, America has two major issues to deal with--jobs and the deficit. Including increased taxes will lead to a drop in domestic production, domestic jobs and domestic revenues. The oil and natural gas industry already supports 9.2 million American jobs and with a dedicated approach to domestic energy production, our industry can put more Americans to work and help decrease the deficit."

Watch the video above orclick here for video and transcript of the President's address.

Andclick here to view the Republican response by Roby.Click here for the transcript.