Feb. 12 (Bloomberg) -- The Obama administration will seek to repeal $46.2 billion in subsidies for oil, natural gas and coal companies in the next 10 years, to fund renewable energy spending, Energy Secretary Steven Chu said.
The plan is part of President Barack Obama’s commitment to lower dependence on fossil fuels and increase to 80 percent the share of U.S. electricity from “clean” sources by 2035. Cutting the subsidies will help pay for $8 billion in “clean energy” investments, Chu wrote on his blog yesterday. The president is scheduled to present the 2012 budget on Feb. 14.
“Fiscal responsibility demands shared sacrifice,” Chu wrote.
The reduction in subsidies, which would cost energy companies $3.6 billion in 2012, can be easily absorbed by the profit-rich oil industry, Obama said in Jan. 25 State of the Union address. Exxon Mobil Corp., the world’s largest company, increased profit to the highest level in more than two years in the fourth quarter, Irving, Texas-based Exxon said on Jan. 31.
“We do not seek and do not ask for any subsidies,” Bill Colton, vice president for corporate strategic planning at Exxon, said on a Jan. 27 conference call with reporters. “If somebody wants to take away incentives from us, we think they should be taken away from everyone.”
The Energy Department will also seek to cut the budget for fossil-fuel research by 45 percent, or $418 million, according to the posting.
The cuts to the fossil energy office include ending a program that studies how to extract oil and gas from shale rock, tar sands and other “unconventional reservoirs,” according to an Energy Department fact sheet.
The program also researches how to produce coal from mines now deemed un-minable.
Chu said the department was taking “responsible steps to cut wasteful spending and reduce expenses.”
The department also is closing the Holifield Radioactive Ion Beam Facility at the Oak Ridge National Laboratory in Tennessee, saving $10.3 million. In January, the department announced it would shut down the Tevatron at Fermi National Laboratory in Batavia, Illinois, saving $35 million in 2012.
The budget would cut funding for the hydrogen technology program by more than 41 percent, or about $70 million, according to Chu.
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