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Obama seeks repeal of fossil fuel subsidies to fund renewable energy

American energy
Steven Chu
Washington D.C., United States — ESI-AFRICA.COM — 14 January 2011 – The Obama administration will seek to repeal US$46.2 billion in subsidies for oil, natural gas and coal companies in the next 10 years, in order to increase government funding of renewable energy spending, says American energy secretary Steven Chu.

The plan is part of President Barack Obama’s commitment to lower dependence on fossil fuels and to increase to 80% the share of U.S. electricity from “clean” sources by 2035. Cutting the subsidies will help pay for US$8 billion in “clean energy” investments, Chu wrote on his blog.

Announcing the intention to cut fossil fuel funding to increase spending on renewable energy, Chu wrote: “fiscal responsibility demands shared sacrifice.”

“The reduction in subsidies, which will cost energy companies US$3.6 billion in 2012, can be easily absorbed by the profit-rich oil industry,” Obama said last month in his State of the Union address.

Texas-based Exxon Mobil Corporation “’ the world’s largest company “’ increased profit to the highest level in more than two years in the fourth quarter of 2010. “We do not seek and do not ask for any subsidies,” said Exxon vice president for corporate strategic planning Bill Colton in a recent 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%, or US$418 million, according to the posting.