By Bruce Alpert
President Barack Obama accused Republicans on Thursday of trying to exploit rising gasoline prices to push for more drilling and continuation of tax breaks for oil companies making near record profits. "It's outrageous. It's inexcusable. And every politician who's been fighting to keep those subsidies in place should explain to the American people why the oil industry needs more of their money -- especially at a time like this," Obama said in an energy speech to students at the University of Miami. He pegs the costs of oil and gas tax subsidies at $4 billion annually.
"You can bet that since it's an election year, they're already dusting off their 3-point plan for $2 gas," Obama said. "And I'll save you the suspense. Step one is to drill and step two is to drill. And then step three is to keep drilling. ... Well, the American people aren't stupid. They know that's not a plan, especially since we're already drilling."
Louisiana Republicans reacted strongly to the president's speech, saying his policies, beginning with a moratorium on deepwater drilling after the 2010 BP oil spill in the Gulf of Mexico and continuing with his refusal to grant a permit for the Keystone XL Pipeline, is a major factor for the spike in prices at the pump.
"Higher energy prices belong to him and his failed energy policies," said Rep. Jeff Landry, R-New Iberia.
Sen. Mary Landrieu, a Louisiana Democrat, also took exception to the president's comments, saying "pulling the rug out from underneath the domestic oil and gas industry was not the answer 10 years ago, five years ago and it is not the answer today."
"I share the president's frustration on our complex and inefficient tax code," Landrieu said. "But I strongly disagree with his efforts to single out one sector of the energy industry and will continue to support tax provisions in the law that help our independent producers power our economy and create jobs for hardworking Americans," Landrieu said.
Obama said he realizes the American people are struggling with higher gas prices and said his administration is looking at every possible solution. But, he said, there are no "silver bullets" to a price surge caused largely by unrest in the Middle East and specifically Iran's threat to shut down a major oil and gas transport route.
"A lot of folks are going through tough times as a consequence," Obama said.
The issue could be perilous for the president, who is running for a second term in November.
The website GasBuddy.com reported that the average price for gas nationwide Thursday was $3.59 a gallon, compared with $3.23 a gallon one year ago. Gas prices averaged a little less than $2 a gallon three years ago. Some are warning of $5 gas later this year.
Speaking to the largely student audience in Miami, Obama said the GOP is offering false election-year promises that if only his administration would allow more drilling the price of gasoline would plummet.
During his successful campaign for president in 2008, Republicans promoted policies to encourage drilling, or as then vice presidential candidate Sarah Palin put it, "drill baby drill."
Obama said he'll continue to champion a comprehensive approach to energy, combining more domestic production while encouraging alternative energy sources.
Sen. David Vitter, R-La., faulted the president for not even mentioning in his energy speech the Keystone XL Pipeline, which Obama rejected, at least temporarily.
"I actually agree with the president on one thing: There is no silver bullet, and we do need an all-of-the-above strategy," Vitter said. "But that means focusing on proven energy sources like oil and gas first, and letting other, newer energy sources succeed and fail in the marketplace. Unfortunately, this administration's approach has been to throw billions of dollars at unproven energy projects while just hoping that the technology would catch up."
Rep. Steve Scalise, R-Jefferson, also reacted negatively to the president's address.
"American families cannot afford to keep paying the 'Obama premium' at the pump, and we must quickly reverse the president's failed policies so we can increase American energy production and create thousands of good jobs here at home," Scalise said.
Landry seemed to mock the president's speech. "The American people aren't stupid," Landry said, repeating Obama's words. They realize, he said, that targeting the oil and gas industry "for higher taxes threatens the one industry in America that is producing good, high-paying jobs."
National Ocean Industries Association President Randall Luthi said the president is right to call for an "all of the above approach" to the nation's energy problems.
"However, in spite of today's mention of the importance of oil and natural gas, we remind the administration that all of the above does indeed include oil and natural gas. To date, the administration's actions hindering domestic production has eclipsed any fleeting words of support."
Obama said domestic production in the United States is at its highest levels since 2003.