Obama regroups on energy after failure of his 2011 proposals

President Obama outlined two major energy goals in his 2011 State of the Union address: eliminate oil tax breaks and get 80 percent of the country’s power from low-carbon sources like nuclear, solar and wind by 2035.

One year later, as Obama prepares to deliver the third State of the Union address of his presidency, little progress has been made toward either goal.

“I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies,” Obama said in his 2011 address. “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.”

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Eliminating oil industry tax breaks was a top priority for Obama and liberal Democrats in Congress last year. The White House and Democrats have called for killing oil industry tax breaks for years, but that discussion gained momentum last year because of high oil-and-gas prices, as well as the high-profile debate over the deficit.

In speech after speech, Obama cast oil industry tax breaks as an egregious example of the flaws with the country’s tax code. The oil industry, in turn, launched a massive public relations and lobbying campaign to preserve the tax breaks.

Senate Democrats pushed a bill last year to eliminate $21 billion in tax breaks for the biggest oil companies during the next decade. But the bill failed in May on a 52-48 vote when 60 were needed to advance the measure, amid opposition from Republicans and centrist Democrats.

Democrats again pushed to eliminate the tax breaks on the bipartisan deficit “supercommittee.” But the supercommittee, which was charged with cutting the deficit by at least $1.2 trillion, collapsed in November, as did Democrats’ opportunity to nix the tax breaks.

In his 2011 State of the Union address, Obama also called for a “clean-energy standard” mandating that utilities generate 80 percent of the country’s electricity from low-carbon sources like wind, solar, natural gas and nuclear power by 2035.

“Now, clean-energy breakthroughs will only translate into clean-energy jobs if businesses know there will be a market for what they’re selling,” Obama said. “So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean-energy sources.”

Obama’s call for a clean-energy standard revived long-time discussions about the proposal. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.), an advocate of the plan, began working with the White House and the committee’s top Republican, Alaska Sen. Lisa Murkowski, on crafting a bill.

Bingaman reached out to the Energy Department’s statistical arm, the Energy Information Administration, to conduct a cost-benefit analysis on various versions of the proposal.

But there is little appetite in Congress for a clean energy standard. Bingaman acknowledged as much last year.

“It’s hard to see how we get the votes to pass it,” Bingaman said in October. “I think my effort has been to try to be sure that we do the best job we can of getting a clean-energy standard designed in a way that would be good policy. We’ve taken pains to do that. That’s why we haven’t rushed to introduce a bill.”

Bingaman has said he will introduce a clean-energy standard early this year.

In recent months, the Obama administration has launched its “We Can’t Wait” campaign, which focuses on things that the administration can do without relying on the increasingly divided Congress.

When it comes to energy, the administration issued a number of major regulations during the last year, including new vehicle fuel economy standards and landmark clean-air rules. The regulations face major resistance from Republicans and some centrist Democrats in Congress.

Obama is likely to focus on regulatory issues that don’t require congressional approval in his upcoming State of the Union address, which is slated to begin at 9 p.m. Tuesday.

He will reportedly call for an expansion of domestic oil and natural-gas production, an issue that could win over centrists going into the upcoming election.

The speech comes just weeks after Obama rejected the Keystone XL oil sands pipeline, a decision that has infuriated Republicans and the oil industry.

The American Petroleum Institute, the powerful oil industry trade groups, said Tuesday it hopes that Obama’s calls for expanded drilling is more than “lip-service.”

“We hope today is different and that after tonight, he will follow through and his actions will match his words,” API President Jack Gerard said on a conference call.


—This story was updated at 10:56 a.m.