Obama: Nation can't drill its way out of soaring gas prices

President Obama called for the elimination of billions of dollars in oil industry tax breaks Friday, while stressing that the United States can’t drill its way out of high gas prices.

“We can’t just drill our way out of the problem,” Obama said during an energy policy speech in Indiana Friday. “If we’re serious about addressing our energy problems, we’re going to have to do more than drill.”

ADVERTISEMENT
Obama’s remarks come as Washington policymakers are feeling pressure to take action to address high gas prices, which are nearing a nationwide average of $4 a gallon.

Republicans have ramped up calls for expanded domestic oil-and-gas production. House Republicans passed the first of three offshore drilling bills Thursday that have been fast-tracked by GOP leadership.

But Democrats, for their part, are pushing for the repeal of billion of dollars in oil industry tax breaks, citing record oil industry profits and soaring pump prices. Senate Majority Leader Harry Reid (D-Nev.) is expected to bring a bill repealing the subsidies to the floor next week. But the proposal faces major hurdles in the Senate.

During his speech, Obama called for “putting an end to the unwarranted subsidies that we are giving oil companies right now through the tax code.”

“If you’re already paying them at the pump, we don’t need to pay them in the tax code,” he said.

He noted that it’s important to “encourage safe and responsible oil production here at home,” but called for a wide-ranging energy policy strategy focused on reducing the country’s oil imports by one-third by 2025, ramping up vehicle fuel economy standards and relying on low-emission electricity sources.

Obama spoke at Allison Transmission, a hybrid vehicle technology manufacturing plant in Indianapolis.

Energy analysts say expanded domestic oil production would have almost no near-term effect on gas prices.