Obama Seeks Tax Break for Natural-Gas Trucks, Oil Lease Sale
January 26, 2012, 5:12 PM EST
By Julianna Goldman and Jim Snyder
Jan. 26 (Bloomberg) -- President Barack Obama said tax breaks for natural-gas powered trucks will help the U.S. cut its dependence on imported oil.
Obama, in his second day promoting policies laid out in his State of the Union address on Jan. 24, proposes a credit equivalent of 50 percent of the extra cost of purchasing a natural gas-powered truck compared with one that runs on diesel or gasoline.
Developing natural gas “could power our cars and our homes and our factories in a cleaner and cheaper way,” Obama said in the text of remarks in Las Vegas at a United Parcel Service Inc. natural gas refueling station built with the aid of money from the economic stimulus. “We, it turns out, are the Saudi Arabia of natural gas. We’ve got a lot of it.”
U.S. energy production, manufacturing and education are shaping up to be the main themes of Obama’s economic message in his re-election campaign. His trip this week runs through five electoral battleground states that the president’s political advisers have targeted for the November vote.
The five, Iowa, Arizona, Nevada, Colorado and Michigan, have a total of 48 of the 270 Electoral College votes needed to claim the White House. Obama won all of them except Arizona in 2008.
Energy Debate
The initiative Obama promoted today grows out of speech on U.S. energy policy last March, in which Obama called for cutting oil imports by one-third in a decade. Republicans have accused his administration of stifling production through regulations and restrictions on drilling on public lands, particularly offshore
“This administration’s lofty rhetoric” on increased American energy production doesn’t match “their job-destroying actions that have blocked new energy production on federal lands and waters,” Washington Republican Doc Hastings, chairman of the House Natural Resources Committee, said in a statement.
The U.S. is the world’s largest oil-consuming country and about half of that comes from imports, according to the U.S. Energy Information Administration.
Billionaire investor Boone Pickens has been lobbying for incentives to stimulate greater use of natural gas as a vehicle fuel to replace imported oil. During the 2008 campaign he met with Obama and Arizona Senator John McCain, the Republican presidential candidate, to discuss the proposal. Pickens also promoted wind and solar sources to generate electricity, which Obama also has endorsed.
Pickens Reacts
Pickens said the president’s initiatives on energy mirror the proposals he outlined almost four years ago.
“The ball’s now in Washington’s court,” Pickens said in a statement. “Despite the political partisanship that divides Washington, I am hopeful and confident Congress will put America’s best energy future first.”
Legislation to spur greater gas use has been introduced in the House and Senate.
Pickens, founder and chairman of Dallas-based BP Capital LLC, is the largest shareholder of Clean Energy Fuels, a natural-gas supplier for bus and truck fleets. Obama’s audience today included employees from UPS and Clean Energy Fuels, according to the White House.
Gulf Lease
Obama also highlighted a previously proposed lease sale for oil and gas production in the central Gulf of Mexico to take place on June 20.
The administration plans to make approximately 38 million acres available in a lease sale that could result in production of 1 billion barrels of oil and 4 trillion cubic feet of natural gas, according to the Department of Interior.
“The Central Gulf of Mexico remains the area with the greatest offshore oil and gas potential in the entire United States outer continental shelf,” said Tommy P. Beaudreau, director of the Bureau of Ocean Energy Management, in a statement.
Obama pointed to natural gas production in his State of the Union address, his last before he faces voters in November, as a way to support thousands of jobs and reduce oil use.
He backs drilling for gas in shale rock. Hydraulic fracturing, the process of injecting water, sand and chemicals underground to free gas trapped in rock, could create more than 600,000 jobs by the end of the decade, according to the administration.
Regulating Fracking
Obama said the drive for new drilling would be accompanied by regulations to ensure safe drilling practices. Those would include a requirement that companies operating on public lands disclose the chemicals used in the fracking fluid.
U.S. natural-gas production averaged 1.89 trillion cubic feet a month through October, 13 percent higher than the average during President George W. Bush’s two terms, according to Energy Department data. Crude oil production is 2 percent higher, the department said.
From Las Vegas, Obama traveled to Buckley Air Force Base in Aurora, Colorado, to highlight a U.S. Navy plan to purchase one gigawatt of electricity from solar, wind and other renewable energy sources. A gigawatt can power 250,000 homes, the administration said.
--With assistance from Margot Habiby in Dallas. Editors: Joe Sobczyk, Bob Drummond
To contact the reporters on this story: Julianna Goldman in Washington at jgoldman6@bloomberg.net; Jim Snyder in Washington at jsnyder24@bloomberg.net
To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net
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