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Oil subsidies must go, but we can’t stop there; Department of Energy (DOE) Loan Guarantee Program will continue to fail; increased production of offshore oil and gas must guarantee fair royalty revenue for taxpayers.

In the last night’s State of the Union address, President Obama discussed the important issue of domestic energy production and the need for federal support to get it “off the ground.” But federal energy subsidies—from tax credits and loan guarantees, to liability caps and foregone revenue—are a complicated web of giveaways that disproportionately benefit companies that don’t need them. We have a fundamentally flawed system that continues to subsidize highly profitable mature energy industries. We believe the slate must be cleared. Kudos to the President for calling for an end to oil and gas subsidies, but we can’t stop there. We must eliminate all energy subsidies.

The President later acknowledged that this support does not always succeed. Last summer, we saw this with Solyndra, the solar start-up that received a $500 million DOE loan guarantee. But as we’ve said before, DOE loan guarantees are guaranteed to fail time and time again. The loan guarantee program has a flawed structure that continues to jeopardize billions of taxpayer dollars on not only renewable loans, but also multi-billion nuclear reactors and liquid coal facilities.

Last night the President also made the commitment to increase offshore oil and gas production. This increased production could generate significant revenue in royalties. Unfortunately, over the years, taxpayers have lost billions on royalty-free oil and gas leases. Taxpayers have also lost because of a corrupt and inadequate royalty collection system. In today’s budget climate, we cannot afford to lose this valuable revenue. These problems must be resolved as we move forward with additional energy production on federal lands and waters.