Obama to roll out plans for funding transportation R&D during lab visit

Source: Hannah Northey, E&E reporter • Posted: Friday, March 15, 2013

President Obama will urge Congress today to establish an “energy security trust” that would spend federal revenue from oil and gas production on research in low-carbon transportation technologies, an idea the administration believes has bipartisan backing on Capitol Hill.

The plan, which Obama unveiled in his State of the Union address last month, would provide $2 billion over the next 10 years for research in advanced vehicle technology, including cars powered by electricity, homegrown biofuels, biocells and domestic natural gas, White House officials said yesterday.

Obama’s announcement coincides with his tour today of the Argonne National Laboratory in Chicago’s western suburbs, where researchers are developing advanced automobiles and batteries. The lab has been working on advanced car batteries since the 1990s, White House officials said.

The presidential visit is also aimed at highlighting what lab directors say are the devastating impacts of sequester cuts. Argonne Director Eric Isaacs and two other Department of Energy lab chiefs told The Atlantic this week the sequester could trigger “the loss of important new scientific ideas that now will not be explored, and of brilliant young scientists who now will take their talents overseas or perhaps even abandon research entirely.”

While Obama is trying to cash in on bipartisan support for an energy trust on Capitol Hill, congressional debate is likely to surface around the mechanics of how to generate its cash. A GOP Hill aide said Republicans are skeptical of the administration’s promises of energy “reforms” after years of inaction.

Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate Energy and Natural Resources Committee, highlighted her own support for such a fund in an “energy blueprint” that she released earlier this year. Murkowski’s “Advanced Energy Trust Fund,” however, would be replenished with revenue from new oil and gas drilling (Greenwire, Feb. 4).

Murkowski spokesman Robert Dillon said Obama’s plan strays from Murkowski’s proposed creation of a fund backed by the production of new energy. Dillon said he hopes the Obama administration embraces the senator’s idea.

“The president says he wants to divert a share of the royalties from offshore production that has already been factored into the budget, which could mean either deficit spending or less funding for the Land and Water Conservation Fund,” he said. “The only other source would be new taxes. There’s a better way that not only funds investment in research but also addresses our need for affordable and abundant energy.”

Obama’s trust would instead by supported by increased revenue flowing from oil and gas production in the outer continental shelf, White House officials said. Those revenues are bound to increase because of leasing production and price trends, as well as energy reforms Obama plans to propose in his fiscal 2014 budget, they said.

White House officials said they are looking at a pilot program in North Dakota’s Bakken Shale formation to determine where state regulators might reduce permitting time while ensuring robust environmental reviews. But the administration wouldn’t seek to increase domestic oil and gas drilling or change its five-year plan for the outer continental shelf and would continue to oppose development in the Arctic National Wildlife Refuge and along the Atlantic and Pacific coasts, officials said (Greenwire, Feb. 13).

Expanded oil production also was a topic of conversation during Obama’s meeting with Senate Republicans yesterday.

“He went on to talk about his desire to have more American energy production, including oil, and he talked about in the Gulf and on U.S. soil,” Sen. John Barrasso (R-Wyo.) told reporters after the meeting.

White House officials also pointed out that investments in research and development have already helped slash the median price to manufacture a plug-in hybrid electric vehicle battery by almost half, and similar improvements have taken hold in prices for biofuels. Boosting advanced vehicle research along with new stricter fuel economy standards will help wean the country from oil dependence and curb emissions of greenhouse gases as part of the administration’s “all of the above” energy strategy, they said (EnergyWire, Feb. 14).

The proposed energy trust, they added, would also protect the country from oil-price shocks and provide a reliable source of investment and research funding without adding to the national deficit.

Today’s announcement also coincides with the release of a U.S. EPA report that is expected to show the United States is already becoming a leader in advanced vehicles.

From 2007 to 2012, EPA estimates, U.S. carbon emissions dropped by 13 percent while fuel economy values increased by 16 percent, White House officials said.

EPA will also reveal that car buyers have twice as many hybrid and diesel vehicle choices as they did five years ago. They also have a growing set of plug-in electric vehicle options, and there has been a sixfold increase in the number of car models with combined city and highway fuel economies of 30 mpg or higher, the officials said.

The creation of the Energy Security Trust will also be the topic of discussion at a public summit next week that will be hosted by the advocacy group Securing America’s Future Energy and attended by Heather Zichal, deputy assistant to the president for energy and climate change. The group proposed that such a trust be funded by revenues from drilling in frontier areas including the Atlantic, Pacific, ANWR and the eastern Gulf of Mexico (Greenwire, Feb. 13).