x Abu Dhabi, UAETuesday 25 July 2017

Obama targets oil firms in State of the Union speech

STATE OF THE UNION: A call to end tax breaks for oil giants and a plea for Americans to embrace clean energy, President Barack Obama's State of the Union address will reverberate around the world.

Barack Obama rounded on 'Big Oil' calling for an end to tax breaks for energy giants in a highly charged State of the Union address.
Barack Obama rounded on 'Big Oil' calling for an end to tax breaks for energy giants in a highly charged State of the Union address.

Barack Obama rounded on oil companies calling for an end to tax breaks for energy giants in a highly charged State of the Union address which will be keenly read by major crude exporters such as Saudi Arabia and the UAE.

The US president also urged Americans to boost their clean energy consumption to 80 per cent in the next 25 years, a change he wants Congress to support.

Mr Obama's speech comes less than a year after a disastrous oil rig spill in the Gulf of Mexico that left many Americans resentful of energy companies that have benefited from generous tax breaks.

"With more research and incentives, we can break our dependence on oil with biofuels," Mr Obama said in his annual address before Congress last night.

The president urged the US, the world's largest energy consumer, to source the major part of its energy from renewable sources such as wind and solar as well as natural gas, nuclear and "clean coal".

Nuclear power now provide the US with one fifth of its energy, and renewables with a little over 11 per cent.

That growth, Mr Obama hopes, can be catalysed if Congress cuts the tax breaks it currently hands out to oil companies. The president began urging Congress to do so a few months after the BP Deepwater Horizon spill, but proposals to cut those breaks have not been succeeded on Capitol Hill, where major oil and gas companies are represented by one of the US's most powerful lobbies.

"I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies," Mr Obama said. "I don't know if you've noticed, but they're doing just fine on their own."

Mr Obama cast investment in clean energy business as well as information technology and biomedical research as key to US development.

He compared the US's status now to its situation half a century ago, when it was wincing from losing the race to space to the Soviet Union and its satellite, Sputnik.

"But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs," Mr Obama said. "This is our generation's Sputnik moment."

ayee@thenational.ae