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Flashback to 2009: Administration Policies Sought to Discourage ‘Overproduction’ of Oil

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In May 2009, four months into the Obama presidency, retail gasoline prices averaged $2.32 per gallon. Rep. Charles Boustany (R-LA) wrote Treasury Secretary Tim Geithner to express concern about the impact that the Administration’s budgeted changes in tax policy would have on the oil and gas industry. Secretary Geithner clearly laid out the Administration position in his letter of response (pdf link).

That was then, this is now.

In just three years’ time, retail gasoline prices are up 68%. $4.00+ gasoline prices loom as a key reelection vulnerability for the President; in response, the Administration’s rhetoric has shifted to “energy friendly”, but its original energy-hostile policies have not changed a whit.

From Secretary Geithner’s May 2009 letter:

The Administration believes that oil and gas preferences distort markets by encouraging more investment in the oil and gas industry than would occur under a neutral system. To the extent the credit (sic) encourages overproduction of oil, it is detrimental to long-term energy security and is also inconsistent with the Administration’s policy of reducing carbon emissions and encouraging the use of renewable energy sources through a cap-and-trade program. Moreover, the credit (sic) must ultimately be financed with taxes that result in underinvestment in other, potentially more productive, areas of the economy.

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