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California Senator Wants Congress To Cut Oil Company Tax Breaks

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VALLEY VILLAGE (AP) — A California Senator has partnered with President Obama in asking Congress to end $4 billion in annual tax breaks for the oil and gas industry.

Drivers in 22 states are paying more than the national average of $3.91 per gallon. In Alaska, California and Connecticut, it’s $4.20 or more. In Valley Village, it’s $4.37.

Exxon Mobil Corp. this week reported nearly $11 billion in profits for the first quarter of this year. Competitors also had huge gains and Boxer believes these companies are profiting from rising pump prices.

“Big oil is taking us to the cleaners every single day. We have to stand up to them,” says Boxer who became a United States Senator in 1993.

In Washington, President Obama has pushed to stop the subsidies while also conceding that would not have an immediate effect on prices. He has also called for the Justice Department to investigate possible price fixing and said this week that he was also prodding oil-producing countries such as Saudi Arabia to increase production.

The president said money recouped from ending the oil and gas tax subsidies should go to new energy resources and research. He said he refuses to cut spending on clean energy initiatives.

Opponents say ending the subsidies would mean tax increases that would end up costing jobs.  They also say those costs would be past onto consumers.

Energy Expert Mark Bernstein doesn’t believe oil companies are colluding to keep the price up. He says they’re just doing business. Although releasing oil from the Strategic Petroleum Reserve would reduce prices at the pump in the short term, in the long term Bernstein believes it’s all about changing consumer habits.

“It wasn’t that long ago when it was $4.00 a gallon before right and people stopped buying SUVs for a little while,” says Bernstein. “Then when prices came back down — not very far — but they came back down, people started buying SUVs again.”

Senate Majority Leader Harry Reid, D-Nev., says he plans to consider Obama’s proposal as early as this coming week.

(TM and © Copyright 2011 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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