WASHINGTON – In his State of the Union address Tuesday night, President Barack Obama called for investments into clean energy, declaring they should be paid for in part by cutting federal subsidies and tax breaks for the oil industry.
Obama said the United States should get 80 percent of its electricity from clean energy sources by 2035, though he included nuclear power, "clean coal," and natural gas as part of that standard, in addition to wind and solar.
"With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015," Obama said, calling also for investments in high speed rail to cut fossil fuel consumption.
"We need to get behind this innovation," Obama said. "And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if -- I don’t know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's."
The New York Times reported last July that oil industry subsidies "average about $4 billion a year according to various government reports," adding that "oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process."
The federal government also grants oil companies tens of billions of additional dollars in tax breaks on capital investments not offered to other industries, the Times found.
Last year, the Senate defeated an effort to strip $35 billion in tax write-offs from oil companies, reflecting the political influence of an industry that spent over $1 billion on lobbying between 1998 and 2010, according to the Center for Responsive Politics.
Efforts to reform energy in Obama's first two years hit a brick wall when the Senate failed to take up a comprehensive energy and climate change bill passed by the House. Part of the reason was a virtually unanimous Republican refusal to enact a carbon tax or cap and trade system to cut greenhouse gas emissions.
Obama's remarks on energy Tuesday received praise from a coalition of environmental and progressive groups, including the Center for American Progress Action Fund, Environment America, Environmental Defense Fund, League of Conservation Voters, Natural Resources Defense Council, Sierra Club and Union of Concerned Scientists.
The groups said in a statement they were "pleased that the President recognized that we cannot rely on 19th Century energy technology to power our 21st Century economy" and heralded his efforts in "establishing a clean energy goal."