Obama announces $2 billion alternative fuel research proposal

CHICAGO — President Barack Obama returned to Chicago Friday to push an energy policy aimed at weaning the country off of oil by using revenues from increased oil and gas production.

In a roughly 20-minute speech at Argonne National Laboratory, Obama touched on research into batteries, natural gas, wind, solar and nuclear power that he deemed vital to America having a long-term healthy economy and environment.

As part of his administration’s overall plan, Obama also formally introduced a proposal to establish a $2 billion trust from royalties the government receives from offshore drilling. Over 10 years, that money would be used to support energy research into alternatives to gasoline, he said.

Administration officials have said they expect revenue to support clean fuels research to flow from greater oil and gas drilling, part of Obama’s “all-of-the-above” energy strategy, but which critics assert amounts to conflicting goals.

“We have to maintain our edge,” Obama said. “Few areas hold more promise for creating more jobs … than how we use American energy.”

In pitching the “Energy Security Trust”, Obama presented it as a matter of consumer concerns, as well.

“The only way to really break this cycle of spiking gas prices, the only way to break that cycle for good, is to shift our cars entirely, our cars and trucks, off oil,” Obama said.

The role of the trust, which will be in the president’s budget proposal, would be to support cutting-edge research into fuels that would eventually replace gasoline, a prospect that the officials conceded was years away. They added that no new territory would be added to federal lands already set aside for energy development.

Revenue channeled to the trust would be on top of revenue already expected from federal lands, and would not take money out of other government coffers to put to this project, they said.

The announcement builds on an idea Obama floated during his State of the Union speech to boost energy self-sufficiency as domestic production increases and demand falls.

The announcement also comes against the backdrop of high gasoline prices nationwide, and arrives as the White House grapples with issuing a permit to build the controversial Keystone XL oil pipeline from Canada to Texas.

A recently completed State Department environmental study concluded that the pipeline would have minimal effect on the environment, increasing the chances of the project’s approval.

A project like the trust aimed at weaning the country off gasoline might be offered as a way to mute criticism from environmentalists before a decision on Keystone XL.

The White House officials said the idea for the trust came from a group of corporate chief executives and former military officers.

In a telephone news conference, the White House officials indicated that the trust would fund research at government laboratories, universities and private companies, similar to the Energy Department’s Advanced Research Projects Agency — Energy.

Margot Anderson, executive director of the energy project at the Bipartisan Policy Center, a Washington research group, said others had suggested similar initiatives to redirect revenue from energy development on public lands to new research, including Sen. Lisa Murkowski, R-Alaska), the ranking member of the Senate Energy and Natural Resources Committee.

Anderson said they had inevitably become ensnared in discussions about opening more land to drilling or giving less revenue to the federal budget, politically unappealing alternatives in Washington.

Brendan Buck, spokesman for House Speaker John Boehner, said the proposal in its current form was unacceptable. “For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically. Unfortunately, this administration has consistently slowed, delayed, and blocked American energy production.”


Obama spoke after taking a tour officials said he requested of Argonne, the Department of Energy’s lead battery research laboratory.

For decades, the lab has worked to develop technology to power plug-in electric cars, such as the Chevy Volt.

In November, the U.S. Department of Energy chose Argonne to lead a $120 million joint collaboration to develop lighter, cheaper batteries for everything from smart phones to electric vehicles that store more power and charge faster.

John Krummel, division director of the lab’s Environmental Science Division, welcomed the president’s energy trust funding proposal, especially given the current political environment.

“That would help stabilize long term projects,” Krummel said. “Things that are highly innovative, high risk, high reward, and if we know the funding’s there people can take a little more risk without worrying about what’s coming next year.”