Obama backs renewable energy amid oil hikes

In his weekly address, Obama also called again for an end to the $4 billion in tax breaks the oil and gas industry receives each year.

"Instead of subsidising yesterday's energy sources, we need to invest in tomorrow's," said Obama. "We need to invest in clean, renewable energy. In the long term, that's the answer."

Rising gasoline prices are expected to be a crucial factor in next year's presidential election, and Obama has ramped up his public statements on the issue.

Earlier this week, he pointed the finger at what he called oil "speculators," before announcing the creation of a Department of Justice working group that will probe oil price fraud and speculation.

The oil and gas industry's billions in tax subsidies were also singled out for criticism during Obama's State of the Union address in February.

"That's $4 billion of your money going to these companies when they're making record profits and you're paying near record prices at the pump," he said in his address. "It has to stop."

The Republican budget plan, aimed at dramatically reducing the country's $14 trillion deficit, calls for steep cuts in transportation and energy, including slashing by 70 per cent a Department of Energy loan guarantee program that supports renewable energy like wind farms and solar installations.

The Obama budget calls for a 70 per cent increase in spending for renewable fuels.

"I've proposed a balanced approach that cuts spending while still investing in things like education and clean energy that are so critical to creating jobs and opportunities for the middle class," Obama said.

Nebraska Senator Mike Johanns, in his Republican rebuttal to Obama's address, said the idea that government policies could create job growth "misses the point entirely."

"Job creation in this country doesn't start with government; it starts with our businesses, especially our small businesses," said Johanns, a former agriculture secretary under president George W. Bush.