President Barack Obama wants to divert some of the revenues the federal government receives for oil and gas drilling to help find ways to shift to cleaner energy sources like battery power and hydrogen fuel cells.
In his State of the Union address, the president noted that there are significant new revenues being raised by leasing rights for expanded oil and natural gas production on public lands. He envisions using some of that to fund a new Energy Security Trust.
“If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we,” Obama said. “Let’s take their advice and free our families and businesses from the painful spikes in gas prices that we have put up with far too long.”
The proposal was one of several energy-related ideas floated in the annual address to Congress and the American people. It expands upon the Obama Administration’s earlier effort to help sponsor the development of cleaner and largely renewable energy alternatives. By linking the proposed Energy Security Trust to drilling revenues it appears the White House is hoping to avoid criticism that it wants to create another tax-and-spend bureaucracy.
Soon after taking office in January 2009, the president approved the creation of several different programs intended to support cleaner energy and, in particular, the development of alternative energy vehicles. But those efforts have run into a variety of political opposition, especially after the bankruptcies of solar energy firm Solyndra and, more recently, battery manufacturer A123.
A handful of firms have received funding, including both Ford and Nissan, but a number of other companies that had expected federal support either had their loans frozen or blocked at the last minute. That includes plug-in hybrid start-up Fisker Automotive, which has been struggling to raise cash to launch its second product line, the Atlantic, after having $329 million in low-interest government-backed loans yanked.
The U.S. has seen a major spike in oil drilling and production over the last few years and could end 2013 as the world’s largest producer of petroleum. It has also experienced a major expansion of natural gas drilling, through a technology called fracking.
That has poured billions of dollars into federal and state treasuries, a source the president would like to tap. But an Energy Security Trust would require the approval of Congress and it is unclear whether that could fly in the current political climate. GOP opponents have rallied against a number of the projects outlined in Tuesday’s State of the Union, deriding them as ways to raise taxes and expand big government.
But proponents of the plan counter that it is critical the U.S. get behind the development of alternative power, and they point out that key allies and rivals alike are already taking such steps. China, for example, is pouring billions of dollars into the development of alternative propulsion systems in a bid to clear up its endemic air pollution problems. Germany has authorized the creation of a massive national infrastructure of alternative energy service stations where motorists will eventually be able to tank up on hydrogen for fuel cell vehicles or get quick charges for their electric vehicles.
A national trust program, declared Pres. Obama, could eventually help America “shift our cars and trucks off oil for good.”
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