Obama seeks to end Oil & Gas Subsidies while increasing Renewable Energy funding
The Obama administration on Monday asked Congress for a second time to end industry tax breaks for oil and gas companies including: deductions for certain drilling costs, tax credits for low-volume oil and gas wells and a manufacturing tax deduction for oil and gas companies. The changes would take effect on January 1, 2011 and save $36.5 billion over 10 years. Oil and gas companies argued that abolishing the tax breaks would reduce domestic drilling, cost jobs and increase U.S. reliance on foreign energy suppliers. The White House contested that ending the subsidies would not have much of a financial impact on energy companies, as $36.5 billion represents about 1 percent of expected domestic oil and gas revenues over the coming decade.
While the Obama administration is seeking to reduce funding for oil and gas in its current budget, renewable energy has been getting a funding boost. Research and development for solar energy received $302 million, up 22 percent, wind energy received $123 million, up 53 percent and geothermal energy was given $55 million, up 25 percent.