Obama calls for using some oil, gas revenue ‘to get cars off oil’

US President Barack Obama proposed using some federal oil and gas revenue to fund an energy security trust that would support “research and technology to shift our cars and trucks off oil for good.”

He also used his 2013 State of the Union address on Feb. 12 to urge Congress to pursue a bipartisan solution to climate change.

“If a non-partisan coalition of [chief executive officers] and retired generals and admirals can get behind this idea, then so can we,” Obama said of the research and development proposal for alternative motor fuels. “Let’s take their advice and free our families and businesses from the painful spikes in [gasoline] prices we’ve put up with for far too long.”

Securing America’s Future Energy, the proposal’s source, said on Feb. 13 that developing alternative transportation fuels are a key part of breaking US oil dependence. Its Dec. 3, 2012, National Strategy for Energy Security report recommended using some revenue from increased revenue from expanded US Outer Continental Shelf leasing and Alaskan production to develop such a fund.

That fund would be strictly focused on pursuing technologies to displace oil in transportation, particularly electricity and natural gas. SAFE’s proposal also called for yearly contributions to be capped, and for the US Department of Energy to report to Congress yearly on the fund’s progress.

The country has already made significant energy progress, Obama told a joint session of Congress. “After years of talking about it, we are finally poised to control our own energy future,” he maintained.

Outlines progress

“We produce more oil at home than we have in 15 years,” Obama said. “We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar—with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before…. And over the last 4 years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.”

But it’s also time to address climate change, he continued. “The 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods—all are now more frequent and intense.”

He asked Congress to work on a bipartisan proposal to address climate change similar to what Sens. Joseph I. Lieberman (D-Conn.) and John McCain (R-Ariz.) developed in their 2003 Climate Stewardship Act that included a cap-and-trade program to limit greenhouse gas emissions.

“But if Congress won’t act soon to protect future generations, I will,” Obama said. “I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

The domestic gas boom has led to cleaner power and increase US energy security, he said.

“That’s why my administration will keep cutting red tape and speeding up new oil and gas permits,” Obama said.

Industry responds

American Petroleum Institute Pres. Jack N. Gerard said Obama recognized the industry as a robust economic engine that invests in American jobs, generates billions of dollars for the government each year, and makes the country more energy secure.

“Unfortunately, 83% of the land and offshore areas controlled by the federal government are still off-limits to oil and gas development,” Gerard said. “President Obama must follow through by implementing a national energy policy, lifting existing restrictions in support of responsible development of our vast energy resources, approving the Keystone XL pipeline, and standing up against unnecessary and burdensome regulations that chill economic growth.”

National Ocean Industries Association Pres. Randall B. Luthi said the organization backs cutting red tape for energy development and was encouraged by Obama’s pledge to speed up the federal oil and gas permitting process. The administration also has the power to increase federal oil and gas revenue by simply opening more parts of the US Outer Continental Shelf for leasing and development, Luthi added.

But Western Energy Alliance President Tim Wigley said it’s time for Obama to match his publicly stated support for more domestic oil and gas development with policies that actually try to accomplish that.

Regina Hopper, president of America’s Natural Gas Alliance, also welcomed Obama’s encouraging words about domestic gas development, but added that US policies relating to the industry must all pull in a consistent and constructive direction.

Kathryn Z. Klaber, president of the Marcellus Shale Coalition in Pittsburgh, said producers in that region appreciated Obama’s pledge to streamline federal energy permitting.

American Gas Association President Dave McCurdy, meanwhile, applauded the president’s Partnership to Rebuild America which would attract private capital to upgrade natural gas and other critical US infrastructure.

Contact Nick Snow at nicks@pennwell.com

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