In its proposed budget for the government's 2011 spending year that starts October 1, the administration said eliminating the subsidies would "foster the clean energy economy of the future and reduce our reliance on fossil fuels that contribute to climate change."

The industry tax breaks that would be lost include: deductions for certain drilling costs, tax credits for low-volume oil and gas wells and a manufacturing tax deduction for oil and gas companies.

"We will not continue costly tax cuts for oil companies," President Obama said.

The changes would take effect on January 1, 2011, and save $36.5 billion over 10 years, according to the budget proposal.