- President Obama wants to end the $4 billion in tax subsidies given to oil companies.
- The Justice Department is looking into criminal and civil law violations as gas prices soar.
- Poll finds consumers blame U.S. oil companies, Middle East turmoil for higher prices.
WASHINGTON — The White House has kicked off an offensive against oil companies as consumers continue to be battered by rising gasoline prices.
"[A] step we need to take is to finally end the $4 billion in taxpayer subsidies we give to the oil and gas companies each year," said President Obama in his weekly radio/Internet address entitled "Instead of Subsidizing Yesterday's Energy Sources, We Need To Invest in Tomorrow's" on Saturday.
"That's $4 billion of your money going to these companies when they're making record profits and you're paying near-record prices at the pump. It has to stop."
The average price for a gallon of unleaded gasoline in the U.S. stood at $3.86 on Monday versus $2.85 a year ago, according to the AAA Daily Fuel Gauge. One gas station in Orlando, Florida, is charging $5.69 for a gallon of regular gasoline, according to CNN.com, and most of California is paying $4/gallon or more.
A U.S. Justice Department task force is looking into whether speculators and oil companies are to blame for recent gasoline price spikes.
The Oil and Gas Price Fraud Working Group "will monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm," said the Justice Department in a statement last Thursday.
"Rapidly rising gasoline prices are pinching the pockets of consumers across the country," U.S. Attorney General Eric Holder said in a statement. "We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity."
According to a new McClatchy-Marist poll, U.S. oil companies and the turmoil in the Middle East get the blame from consumers for rising gas prices.
The poll, which was released on April 21, showed that 36 percent of U.S. residents think the volatility in the Middle East is at fault, while 34 percent say U.S. oil companies are to blame. The poll also suggested that a majority of Americans have changed their driving habits because of rising gas prices.
Inside Line says: Are you changing your driving habits? And who are you pointing the finger at for high gas prices? — Anita Lienert, Correspondent
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tbone85 says:
02:54 PM, 04/26/2011
The $4 billion subsidies are a drop in the bucket compared to the more than $1 trillion we've spent subsidizing oil via Middle East military spending and aid grants over the last 2 decades. There is no easy way out, and we need to all be prepared for some pain in a solution. Gas prices would rise significantly if we weren't propping up these regimes. That rise in price would be painful, but on the other side our use of gasoline and our urge to innovate new solutions would increase and we'd find our way to a brighter future.
The benefits would be greater political independence, energy security, growth in domestic energy jobs, and a reduction in our trade surplus. Making sacrifices for future generations used to be prudent. Now it's merely inconvenient. The shocker has already been spoken; neither the Democrats or Republicans have a real answer. They both lack the courage to suggest a national solution which entails shared pain and reward.
The blame game is a pastime for tribalist sucker's. Our politicians need to spend 90% of their time working on solutions, and 10% getting re-elected. The current situation is the fault of all of us. We the people need to look past the Red State Blue State crap and hold folks responsible for making decisions in the best interest of the nation instead of their party masters.
k55 says:
09:22 AM, 04/26/2011
NOBAMA IN12....this is BS.
69johnny says:
09:17 AM, 04/26/2011
I believe Speculators are definitely in the middle of this, using oil as poker chips in their gambling addiction. Choosing to buy from the highly unstable Middle-east just fuels the anxiety. We're victims of the game..
mdale007 says:
08:39 AM, 04/26/2011
1198sp says:
11:34 PM, 04/25/2011
I like how Americans have 2% of the world's oil but still think that they control the price of Brent and WTI. Brilliant.
http://www.petrostrategies.org/Links/worlds_largest_oil_and_gas_companies.htm
American politicians pander to the same Oil companies for campaign contributions that Obama wants to end all subsidies. American politicians pander to the public for election votes by playing the blame game on the same oil companies. You will find the political system is broken down.
Your statement is 100% correct, the politicians know it, the military knows it, the foreign oil companies know it, Wall Street knows it, but the American public are led to believe that the Oil companies somehow are the cause. Plain stupidity due to the average American misery index going up in the good old U. S. of A.
stingray454 says:
05:57 AM, 04/26/2011
""That's $4 billion of your money going to these companies "
No, that's $4 billion of the GOVERNMENT'S money (well, really, the companies money that the government wants). If he stopped the tax subsidies, the consumer wouldn't see a penny of it, ever. What an idiot.
dgmail says:
04:03 AM, 04/26/2011
George Bush, John Mccain, the GOP, and friends, are going to be a little P.O'd. They won't be getting thier gold plated cell phones and world wide American Express Black/Carbon cards this year.
1198sp says:
11:34 PM, 04/25/2011
I like how Americans have 2% of the world's oil but still think that they control the price of Brent and WTI. Brilliant.
http://www.petrostrategies.org/Links/worlds_largest_oil_and_gas_companies.htm
skw0123 says:
11:28 PM, 04/25/2011
Many comments perpetuate the "oil fantasy" -- that we can just drill more and solve our energy problem. We don't have any oil worth a darn, and even if we did we couldn't produce it fast enough to have any impact on oil price shocks. And even if we COULD produce it fast enough, there is no "our" oil, anyway. International oil companies (i.e., all of them) will readily sell "our" oil onto the global market at the going price. Since American production is a trickle at any level compared to global supply, it really won't make much difference how we scale production. (It does impact our trade balance, but that's another issue...)
"Oil" shale is a crock, and oil sands are not necessarily much better...extraction energy cost per barrel is too high relative to yield. Really our only vast supply of oil (and it is vast)...is conservation. Or if you prefer, energy efficiency. There is absolutely no other answer, the truth is staring us in the face.
financeman2 says:
08:24 PM, 04/25/2011
I am so tired of government dishonesty....only telling us half the facts. Who do you think collects gigantic taxes on these oil company profits? Exxon made 9.25 billion in profits during the first quarter, and I even heard one pundit mention all US oil profits totaled over 100 billion in the first quarter. At a 35% tax rate, the federal government stands to reap huge tax receipts from this price run up. Obama and his minions talk about taking away $4 billion in oil company tax credits, many of which encourage production of minimal wells. Take that incentive away, production declines, exacerbating an already bad problem. I'm not saying this credit should not be scrutinized, but we're only hearing media sound bites.
What I don't see is any mention of rebating the federal tax receipt windfall in the form of reduced federal gasoline taxes...something that could truly provide relief the driving public. Again, we're only told half of the story......
mtnrunner2 says:
06:50 PM, 04/25/2011
Plus, as far as I could tell, we are not "giving" the oil companies anything; it's THEIR money. These are reductions in taxes, i.e. the federal government is REFRAINING FROM SEIZING $4 billion.
There's a huge moral difference between, say, taking tax receipts from me to pay oil companies (which is wrong), vs. letting them keep earnings that are already theirs (which is not wrong).