Continuing his efforts to reduce U.S. dependence on imported oil, President Barack Obama yesterday proposed expanding tax credits now offered to buyers of plug-in cars to those who buy natural-gas vehicles as well.

Given the ugly politics around electric cars and the presidential election season, the proposals aren't given much chance of getting enacted this year, if ever.

But Obama doubled down on his calls to end tax incentives for the petroleum industry, calling oil the "fuel of the past" and urging that U.S. transportation migrate over time to a mix of fuels.

His speech continued a consistent theme of the current administration: Gas prices hurt, but oil dependency is worse.

The president made his proposals at a Daimler truck plant in North Carolina--The New York Times noted that it was his fourth trip to the contested state in six months--and called for Congress to end $4 billion of tax incentives and subsidies to the oil industry to offset the cost.

"Promising" new energy sources

“It’s time to end that taxpayer giveaway," Obama said, calling the oil industry one that's "never been more profitable" and repeating his call for the country to invest in new sources of clean energy that have "never been more promising."

Specifically, Obama called for the existing maximum tax credit of $7,500 for purchase of an electric car to be raised to $10,000.

He proposed that the credit be converted to an effective purchase rebate, which buyers receive within weeks--rather than a tax credit whose effect is seen up to 15 months later--by letting buyers transfer the credit to dealers or financial entities when they purchase.


2013 Chevrolet Silverado 2500 HD bi-fuel (natural gas & gasoline) pickup truck

2013 Chevrolet Silverado 2500 HD bi-fuel (natural gas & gasoline) pickup truck

Plug-ins plus natural gas

He also suggested that credit be expanded to include not only plug-in cars, but those fueled by natural gas and hydrogen as well.

And Obama proposed a new tax incentive for commercial buyers of such vehicles, cutting their taxes over five years by half the increased cost of the alternative-fuel vehicle against a comparable gasoline or diesel vehicle.

Together, those proposals would total $3.7 billion in new incentives, according to the Detroit News.

Infrastructure for up to 15 cities

Finally, the president proposed a second Department of Energy "grand challenge" of $1 billion, to fund installation of alternative-fueling infrastructure in up to 15 cities, accompanied by $650 million in R&D funding to increase the range of electric, natural-gas, and hydrogen vehicles.

Roughly one-third of those cities would install infrastructure for fueling natural-gas vehicles, with the rest continuing to add public charging stations for plug-in electric vehicles.

Barack Obama in Detroit

Barack Obama in Detroit

Addressing concerns over higher gas prices, Obama cited statistics that indicate domestic oil production has increased, more acres are being explored for drilling, and the number of permits issued for pipelines has risen during his time in office.

Beware proposals for $2 gas

The president continued on the path of what he called an "all of the above" energy strategy, but engaged in a bit of political positioning when he warned against politicians proposing "phony election-year promises" for reducing gasoline prices to $2 a gallon "that never come about."

The New York Times coverage noted that Obama did not mention his longstanding goal of having 1 million plug-in vehicles on the nation's roads by 2015.


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