In his first State of the Union address last Wednesday night, President Obama called on Congress to pass a jobs bill with an energy component, financial reform, and comprehensive energy and climate change legislation in that order.
"The House has passed a jobs bill...As the first order of business this year, I urge the Senate to do the same...I want a jobs bill on my desk without delay," Obama said in a more than hour-long speech. He said he wants energy jobs to be a critical component of a jobs bill -- new jobs in clean energy, oil and natural gas, nuclear, biofuels and clean coal technologies. "We should put more Americans to work building clean energy facilities.
"But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America," Obama said.
At a time of record deficits, however, Obama called for the elimination of tax cuts for oil and gas companies. Robert W. Baird & Co. analyst Christine Tezak pointed out that the president "has called for this before, but the tax programs slated for elimination in the FY [fiscal year] 2010 budget proposal survive. Those remain in play and include the current tax regime for percentage depletion and intangible drilling costs."
The president also proposed repealing tax breaks for companies that ship jobs overseas, and giving the tax breaks to the companies that create jobs in the United States.
American Petroleum Institute (API) President Jack Gerard said he was "encouraged" by the president's comments that decisions need to be made about opening new offshore areas for oil and gas development. "Greater access to America's vast oil and natural gas resources would bring more domestic energy, thousands of American jobs, billions in government revenues and less reliance on imported energy," he noted.
But Obama's proposal to repeal producer tax breaks was not well received. "We think any attempt to raise taxes on any industry [where] you want to create jobs would not be a wise decision," an API spokeswoman said.
"We call on the administration's clean energy agenda to take into account the significant contribution that natural gas production from shale is making in creating jobs, revenue and energy security for our country. For example, just last year in Pennsylvania, nearly 50,000 jobs could be attributed to the production of clean-burning shale gas," said R. Skip Horvath, president of the Natural Gas Supply Association.
And while "the president also said the nation must make 'tough decisions about opening new offshore areas for oil and gas development,' we wish he had announced a more clear vision for offshore drilling," he said.
Virginia Gov. Bob McDonnell, who gave the Republican response, decried the impact of the administration's policies on oil and gas. "Here in Virginia, we have the opportunity to be the first state on the East Coast to explore for and produce oil and natural gas offshore. But this administration's policies are delaying offshore production, hindering nuclear energy expansion, and seeking to impose job-killing cap and trade energy taxes."
Obama's second priority is "serious" financial reform legislation. "The House has already passed financial reform...And the lobbyists are trying to kill it, but we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back until we get it right. We've got to get it right," Obama said (see NGI, Dec. 14, 2009).
"Look, I am not interested in punishing banks. I'm interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs...But that can only happen if we guard against the same recklessness that nearly brought down our entire economy."
Congressional passage of a comprehensive energy and climate bill is high on Obama's priority list as well. "I am grateful to the House for passing such a bill last year. And this year I'm eager to help advance the bipartisan effort in the Senate," the president said (see NGI, June 29, 2009).
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