WASHINGTON – The Bush administration has proposed eliminating an oil and gas program championed by Texas lawmakers, saying it amounts to an unnecessary subsidy for oil companies earning record profits.

To end the program, Congress would have to repeal the law that directed $37.5 million last year to a research consortium with its roots in Sugar Land. The consortium, which distributes the funding to companies researching ultra-deepwater drilling and untapped onshore fields, can keep up to 10 percent of its annual funding for overhead costs.

"At today's prices, the department believes there is every incentive for the industry to both produce oil and gas and conduct research and development to enhance production," said Julie Ruggiero, a spokeswoman for the U.S. Department of Energy.

"There is not a need for taxpayers to subsidize oil companies in these efforts," she said.

The Energy Department's proposed 2009 budget also cut funding for another project championed by Texas lawmakers, a zero-emissions coal plant that eventually landed in Illinois. Last month, the department cited steeply rising costs as it dumped FutureGen in favor of smaller projects that test the capture of carbon dioxide emissions.

But the administration's desire to kill the oil technology research program is more longstanding and stands out, given Mr. Bush's call for more production of oil and gas from domestic sources.

The White House's Office of Management and Budget has scored the program as "ineffective" and sought to eliminate it every year since 2005. House Democrats have criticized the program in the past, saying it was inserted into a previous energy bill without debate.

Some of those Democrats are now committee chairmen in the House and could create problems for the program if they renew their criticisms.

However, they would face resistance from several House Democrats from Texas who support the program, including Chet Edwards of Waco and Nick Lampson of Stafford.

The consortium, the Research Partnership to Secure Energy for America, was awarded a contract to manage the funding in May 2006. Its headquarters is in Sugar Land, where it rents office space from a related entity, the Texas Energy Center. The energy center won a $3.6 million grant from Gov. Rick Perry in 2004, mostly because the state expected a massive infusion of federal money through the consortium.

The consortium was formed by the Gas Technology Institute, a group that used to obtain funding for research from a mandatory surcharge on interstate gas transportation. The Federal Energy Regulatory Commission repealed that surcharge in 1998 and phased it out entirely by 2004, leaving the institute dependent on private funding.

The institute, teaming with several Texas universities, formed the consortium and found a new source of funding from royalties that private companies pay to drill for oil and natural gas on federal land.

U.S. Rep. Ralph Hall, R-Rockwall, became its champion. Other Texas lawmakers, including U.S. Rep. Joe Barton and Mr. Edwards, also supported the program. Mr. Lampson became a champion for the program after he succeeded Tom DeLay.

Mr. Hall said Tuesday that the administration is wrong to call the program a handout to major oil companies. He said it would fund research for independent oil and gas producers who are responsible for most of the country's production.

"The program has the potential to uncover 55 years of natural gas and 850 billion barrels of oil from the Lower 48 states alone and will pay for itself in the form of increased royalties," Mr. Hall said.

Mr. Lampson said he, too, would oppose any changes to the funding.

"By sharing the cost, this program actually drives corporations to spend even more on R&D," Mr. Lampson said. "American consumers will be the real beneficiaries of this program because a greater supply means lower natural gas and gasoline prices."