Obama proposed budget rescinds energy industry tax breaks

Exxon Mobil Reported Record $45.2 Billion Profit For 2008
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WASHINGTON (AP) — President Barack Obama outlined a budget plan Thursday that would end $26 billion in oil and gas industry tax breaks, point to a new direction for dealing with nuclear waste and shift government aggressively toward helping to develop renewable energy sources.

Obama called the tax break to the oil and gas industry "unjustifiable loopholes" in the tax system that in most cases other companies do not get.

The proposed budget, details of which were released Thursday, calls for abandoning the decades-old Yucca Mountain nuclear waste project in Nevada and begin the search for another answer to disposing thousands of tons of used reactor fuel now kept at power plants in 31 states. It also would end government subsidies to the nuclear industry to help them certify and plan new nuclear power plants, cutting the program from $178 million to $20 million.

The oil and gas industry tax breaks have often been targeted by congressional Democrats in recent years, but they have not been able to muster enough votes to rescind them. Most Republicans and the Bush administration vigorously defended the tax benefits, saying they're needed to boost domestic oil and gas development.

In the budget statement, Obama said the tax breaks, which are expected to save the oil and gas industry more than $26 billion over the next 10 years, are "unjustifiable loopholes ... costly to the American taxpayer and do little to incentivize production or reduce energy prices."....

Obama's budget also would largely abandon the Bush administration's push to develop hydrogen as an energy source, calling its emergence as a viable fuel unrealistic for the near future. Funding for the program, one cited frequently by President George W. Bush as a key to the country's energy future, would be cut by $101 million to $68 million. A separate $8 million research program on using nuclear power plants to produce hydrogen was canceled.

Other research into electric car technology, better batteries and development of biofuels is "a much better place to put our money," said Chu.