Washington, 15 March (Argus) — President Barack Obama today called on Congress to create a $2bn program to fund research and development of advanced transportation technologies and fuels, using royalties from offshore oil and gas development.
The Energy Security Trust, which Obama proposed in his State of the Union address last month, would spread the funding over 10 years to support “critical breakthrough research” on a range of technologies, including advanced vehicle batteries and biofuels.
The research will help reduce US oil imports while saving money and reducing greenhouse gas emissions, Obama said.
“If we do it well, then that is going to help us avoid some of the perils of climate change and leave a healthier planet for our kids,” he said.
The money would come from royalties for oil and gas development on the Outer Continental Shelf (OCS). White House officials said they expect to include permitting reforms in the fiscal year 2014 budget, along with other leasing and production trends, to generate the additional revenue, which could fund the energy trust fund. As a result, it would not reduce the amount of money currently going the Treasury Department general fund, where most current OCS revenue is collected.
Without stable funding for research, the US could lose its position as a leader in commercializing more advanced vehicles, Obama said, citing an Environmental Protection Agency report released today that said the “rapid adoption” of new technologies has helped bolster the efficiency of US automobiles.
“We cannot afford to miss these opportunities while the rest of the world races forward,” he said.
EPA said that the fuel economy of vehicles sold in the US increased by 16pc from 2007-2012, while CO2 emissions fell by 13pc. In 2012 alone, the efficiency of cars and trucks jumped by 1.4 miles per gallon, based on sales estimates that automakers provided to EPA. The agency estimates that would mean a reduction in vehicle CO2 emissions to 375g/mile and an increase in average fuel economy to 23.8mpg, the largest annual improvements since EPA began reporting on fuel economy.
Automakers said they would welcome “any means” to get new vehicles “off dealership lots and into driveways.”
“But we do not weigh in on the sources of such funding since that is up to policymakers,” the Alliance of Automobile Manufacturers said.
White House officials said they have already reached out to lawmakers about the energy security trust, including Senate Energy and Natural Resources Committee chairman Ron Wyden (D-Oregon) and the committee's ranking Republican, senator Lisa Murkowski of Alaska. White House officials said they were confident the idea could gain traction in Congress since it already has some bipartisan support.
Although Obama today said that the US should move cars and trucks “entirely off oil,” environmentalists said they were disappointed that the proposal would support research into technologies that still use fossil fuels such as oil and natural gas.
“The president should instead go all in on electric vehicles and clean energy sources like wind and solar, while boosting common-sense climate solutions like energy efficiency,” Sierra Club executive director Michael Brune said.
The Independent Petroleum Association of America said it welcomed the inclusion of natural gas vehicle technologies in the research efforts, as well as the changes to the permitting process. But the group said the president must open more areas to development.
“If the president wants to garner more federal revenue, opening up federal lands and waters is the best way to do so,” association president and chief executive Barry Russell said.
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