Obama: Oil and gas subsidies make no sense

WASHINGTON, May 14 (UPI) -- U.S. President Barack Obama Saturday called for an end to the $4 billion in annual subsidies to the oil industry, saying they aren't fair and make no sense.

"In the last few months, the biggest oil companies made about $4 billion in profits each week. And yet, they get $4 billion in taxpayer subsidies each year. Four billion dollars at a time when Americans can barely fill up their tanks. Four billion dollars at a time when we're trying to reduce our deficit," Obama said in his weekly radio and Internet address, outlining steps his administration is taking to stem the rising cost of gasoline.

"This isn't fair, it makes no sense. Before I was president, the CEOs of these companies even admitted that the tax subsidies made no sense. Well, next week, there is a vote in Congress to end these oil company giveaways once and for all. And I hope Democrats and Republicans come together and get this done.

"The American people shouldn't be subsidizing oil companies at a time when they're making near-record profits. As a nation, we should be investing in the clean, renewable sources of energy that are the ultimate solution to high-gas prices. That's why we're investing in clean energy technology, helping businesses that manufacture solar panels and wind turbines, and making sure that our cars and trucks can go further on a tank of gas -- a step that could save families as much as $3,000 at the pump."

The president announced the formation of a task force, led by Attorney General Eric Holder, with the express purpose of rooting out fraud and market manipulation. He also introduced measures to "increase safe and responsible" domestic oil production, including annual lease sales in Alaska's National Petroleum Reserve, the acceleration of offshore oil and gas exploration in the mid and south Atlantic, and the extension of all leases in the Gulf of Mexico affected by last year's Deepwater Horizon oil spill.

A senior administration official, speaking on condition of anonymity, said Friday the government plans to accelerate environmental assessments in the Gulf of Mexico to facilitate lease sales in the western and central gulf by mid 2012. The official said leases in Alaska will be extended for potential activity that did not occur last year "to make sure companies are not harmed by that," adding the government will "tailor" lease terms and introduce graduated fee structures to encourage early development and provide more incentives to access already-leased lands.