Obama eyes oil revenues for clean energy
The US president plans to earmark $2 billion of oil and gas revenues to fund alternative energy research
Early outlines of US president Barack Obama’s all-of-the-above energy policy are taking shape, with plans to earmark $2 billion of oil and gas revenues to fund alternative energy research.
In a speech at the Department of Energy’s Argonne National Laboratory in Illinois, president Obama proposed setting aside $200 million a year for the next 10 years to promote biofuels, fuel cells and advanced electric vehicles (EVs).
The new research programme would be paid for with royalties generated from offshore oil and gas production in federal waters.
Fossil fuels are not excluded from the research funds. The programme includes $375m dollars for researching cleaner and more efficient ways to use fossil fuels, including a $25m cash prize for the first combined cycle natural gas power plant in the US to integrate carbon capture and storage (CCS) and significant funding for new coal technology.
The plan also pledges increased support for nuclear power and exports of American nuclear technology “to promote safe, secure, low-carbon nuclear power growth in countries that are pursuing nuclear energy as part of their energy mix”, according to a statement from the White House.
The announcement adds details to the ambitious agenda Obama set out in his state of the union address on 12 February, when he vowed to fight climate change while accelerating domestic oil and gas production.
Obama is using petrodollars “to shift our cars...entirely off oil”, without increasing the deficit. The irony is that oil and gas drilling on federal land will have to increase significantly to pay for it.
According to the Congressional Research Service, oil production from federal lands fell 5% last year, to 1.6 million barrels per day (b/d), despite a 10% increase in total US output to 6.2m b/d. Production from federal lands is down 20% from 1.98m b/d in 2010, even as production from non-federal regions has jumped 13%.
Revenues, though, are expected to increase over the next five years based on higher production trends in the Gulf of Mexico – which means the fund will have more than enough financial support over the 10-year term.
Obama has vowed to cut net oil imports in half by the end of the decade, through a combination of higher domestic production and lower consumption. He has imposed more stringent fuel economy standards for cars and trucks – more than 54 mpg by 2025 – and has set a goal of doubling the amount of wind, solar and geothermal power on federal lands by 2020. “In the meantime, we'll keep moving on the all-of-the-above energy strategy that we've been working on for the last couple years, where we're producing more oil and gas here at home but we're also producing more biofuels, we're also producing more fuel-efficient vehicles, more solar power, more wind power”, Obama said in his speech.