WASHINGTON – President Barack Obama's first budget wallops the oil and gas industry by eliminating $31.5 billion in tax breaks while blaming the administration of former President George W. Bush for perpetuating the nation's dependence on fossil fuels.

If Congress agrees to Obama's proposals, the long list of tax breaks that would disappear would affect both big and small oil and natural gas producers.

Both reacted strongly against the proposals.

"I am just absolutely flabbergasted," said Houston oilman Bruce Vincent, vice chairman of the Independent Petroleum Association of America. "It's like putting a dagger in the heart of the oil and gas industry in America. If you actually did all these things, it would kill the industry."

Under the president's budget proposals, companies leasing federal lands in the Gulf of Mexico would no longer get waivers or deferrals for federal royalties on oil and gas produced from certain fields. That change would bring in an estimated $5.3 billion between 2010 and 2019.

If companies don't drill the leases within an unspecified time frame, the budget policy language says they should lose the leases.

Smaller companies would have to amortize expenses over a longer period of time – seven years – and would lose the depletion allowance for oil and gas production that's been part of the industry's tax policies for decades.

The companies would no longer be able to write off certain business expenses known as intangible drilling costs, and would no longer get tax credits for spending that recovers oil from the toughest areas of an oil reservoir.

The tone of the oil and gas proposals is plain: The oil and gas era is waning, and the government has to turn its incentives toward renewable energy forms such as wind and solar power.

"The last administration approached our energy needs by focusing on finding more of the fossil fuels we use now," the budget states. "As a result, we are still addicted to fossil fuels and more dependent on foreign oil than ever before. We have yet to make important policy changes and critical investments in the clean energy infrastructure that we'll need to transform our economy."