Reid says measure coming “soon” on axing oil, gas tax breaks

Senate Majority Leader Harry Reid, D-Nev., said Tuesday the chamber soon will consider a measure on repealing oil and gas industry tax breaks, a priority of President Obama’s.

“We’re going to do something on oil subsidies very, very soon,” Reid told reporters in the Capitol.

Obama recently urged both chambers of Congress to hold votes on repealing the tax breaks. It’s likely a non-starter in the GOP-controlled House, and even in the Senate such a measure probably wouldn’t overcome resistance from Republicans and oil-state Democrats.

Obama has said he wants to promote an “all-of-the-above” strategy — once a GOP buzzword — by boosting both conventional and alternative energy and improving efficiency of homes, vehicles and businesses. He has said it’s not fair that major oil companies are getting $4 billion a year in federal support when they’re making record profits all as consumers suffer at the pump.

But Republicans and industry groups oppose rolling back the tax breaks, saying that would harm oil and gas production the country needs.

American Petroleum Institute President Jack Gerard said those “subsidies” aren’t subsidies at all, but tax deductions of a type that benefit a wide range of businesses and industries.

“The president has it backwards,” Gerard said in a recent statement. “Our industry pays the government nearly $90 million a day.”

The GOP and industry have said the proposal serves as one of many examples of how Obama has contradicted his own “all-of-the-above” rhetoric. They point to his withdrawal of onshore leases, planned rules for hydraulic fracturing and other policies that they say have impeded domestic oil and gas production.

Obama has defended his record, insisting he has leased millions of acres for drilling while planning to hold many more lease sales offshore and onshore.

Additionally the White House has seized on a recent report from the Energy Information Administration that found U.S. oil production on federal lands and offshore has trended upward since Obama took office.

Republicans have responded that the production was in spite of Obama’s policies, not because of them.

“Has it ever crossed your mind to send a ‘Thank you’ note to President Bush for approving those leases?” Rep. Louie Gohmert, R-Tyler, told Bob Abbey, director of the Bureau of Land Management, the agency that oversees oil and gas drilling on federal lands, at a hearing.

Republicans have noted that oil production on federal lands and offshore dipped 14 percent from 2010 to 2011. The White House has pointed to the Gulf of Mexico spill and its aftermath — including the promulgation of tougher safety standards and a temporary deep-water drilling moratorium — as causing the decrease and said the general  trend is upward.

Obama plans to take his recent speaking blitz across the country this week. He will speak at oil and gas production fields on federal lands outside Carlsbad, N.M., in one of four stops to tout the “all-of-the-above” platform.

With gasoline prices rising, Obama has ripped GOP proposals to vastly expand drilling as election-year “bumper sticker” rhetoric that wouldn’t help lower global oil prices. He has said his own plan of increasing oil production and reducing oil use would help the most in the long term and that no “short-term silver bullets” exist.