Obama touts tax credits, ending tax breaks and charging carbon polluters

The oil spill in the Gulf of Mexico should force Congress to provide more tax incentives to spur clean energy development while also cutting back billions in tax breaks for oil companies. 

President Barack Obama pushed for accelerating the transition to a clean energy economy by "rolling back billions of dollars in tax breaks to oil companies so we can prioritize investments in clean energy research and development," during a speech at Carnegie Mellon University in Pittsburgh on Wednesday.  

He urged Congress to look again at energy legislation that would set up a cap-and-trade system, requiring companies to purchase carbon pollution credits as they gradually change over to cleaner ways of manufacturing. 

"The only way the transition to clean energy will succeed is if the private sector is fully invested in this future — if capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed," he said. "And the only way to do that is by finally putting a price on carbon pollution."

He acknowledged that it also "means tapping into our natural gas reserves and moving ahead with our plan to expand our nation's fleet of nuclear power plants."

Obama had proposed an offshore oil-drilling plan but made clear on Wednesday that oil production can only be pursued if it's "safe and only if it's used as a short-term solution while we transition to a clean energy economy."

He touted tax credits and loan guarantees in the stimulus bill that "will lead to 720,000 clean energy jobs in America by 2012. By 2015, the U.S. will be making 40 percent of the world's advanced batteries for hybrid cards, up from 2 percent now," he said. 

"We must invest in and embrace the innovation and technology of the future and not the past — that applies beyond our energy policy. That's why we've decided to devote more than 3 percent of gross domestic product to research and development to spur the discovery of services and products and businesses that we have yet to imagine."

In conjunction with that, Obama again proposed making research and experimentation tax credits permanent, which would help businesses afford the high costs of developing new technologies and new products. In 2009, basic research funding received the largest investment in history, he said. 

BP has yet to find a way to stop the oil leak more than a mile under the ocean. The Deepwater Horizon rig leased from Transocean by BP exploded and sank on April 20, killing 11 and starting the nation's worst-ever oil spill.