15 March 2013 18:09 [Source: ICIS news]
WASHINGTON (ICIS)--President Barack Obama is calling on Congress to set up an energy security trust to use some $10bn (€7.7bn) of offshore energy royalty payments to fund breakthrough developments in alternative transportation fuels.
Speaking at the Argonne National Laboratory outside Chicago, Illinois, on Friday, Obama said his proposed trust would spend the $10bn over two years to support research into advanced electric vehicles, more home-grown biofuels, fuel cells and the use of US natural gas as a fuel for vehicle fleets.
He also urged Congress to restore the country's renewable energy production tax credit to support continuing work on solar, wind and biofuel projects.
He said his budget for the next fiscal year will include a 20% boost in funding for the Interior Department to accelerate permitting processes for crude oil and gas development and renewable energy projects.
Obama welcomed growth in domestic production of natural gas but said the US government must take steps “to make this growth safe and responsible”. He said his budget will designate more than $40m for safer natgas production.
He also proposed some $375m to advance work on clean coal technologies and a new $25m prize for the first gas-powered combined-cycle power plant to successfully incorporate carbon capture and storage (CCS).
The president again called for a phase-out of what he termed “inefficient fossil-fuel subsidies”, a goal he has sought in previous budget proposals but which has failed to win congressional support.
US oil and natgas producers consistently challenge Obama's characterisation of manufacturing tax credits as subsidies.
The president's energy security trust proposal is also likely to draw opposition from many in the petrochemicals industry who worry that federal incentives for the use of natgas as a transportation fuel could help drive up prices for natural gas, the principal feedstock for US chemicals production.
Much of what he proposed on Friday is likely to run into stiff opposition in the Republican-controlled House of Representatives, where, by law, federal budgets are drawn up.
In their proposed budget for fiscal 2014, Republican leaders in the House are seeking major reductions in federal spending, in contrast to Obama’s call for more funding for alternative energy research and other federal programmes.
The Argonne lab is a major federal scientific and engineering research facility that focuses on advances in energy, environmental and national security issues.
Originally established as part of the US Manhattan Project to develop the atom bomb during World War II, the lab is operated by the US Department of Energy (DOE) and has some 3,500 employees.
($1 = €0.77)
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