Can Obama's Idea for an Energy Trust Fun

March 20 [Wed], 2013, 17:06
Gasoline prices and global temperatures are on the rise and so, once again, is pressure on Washington to take action on energy and climate change. The chance that the deadlocked Congress will strike a deal this year on a broad law to seriously reform the nations energy systems is slim to nil.

But a few cracks are emerging in that deadlock, with genuine bipartisan supportgathering around a cluster of ideas linking energy priorities from both parties, such as offshore drilling and offshore wind power. The ideas arent comprehensive but even movement on a few small-bite energy bills would represent a big change from the politicized standoffs and sniping of recent years.

Today, in a speech just outside Illinois, President Obama will highlight one of those ideas, and call on Congress to take action on it. For once, that might even happen.

The venue and timing are appropriate: gasoline prices have soared 41 cents per gallon since the beginning of the year, and Obama will speak at the Energy Departments Argonne National Laboratory, which researches electric cars and other alternative vehicle technology.

Against the backdrop of electric cars at a time when Americans are feeling the pain of higher gasoline costs, Obama will ask Congress to take action on an idea he first proposed last month in his State of the Union address: the creation ofan energytrust fund that would research alternative-technology vehicles. The fund would get $2 billion over 10 years, not from taxpayer dollars, but from revenues generated by offshore oil and gas drilling. The idea is to channel money generated by drilling into a fund that researches technology that would ultimately lessen the nations dependence on oil and its global warming emissions. It wontbe enough to end both problems, but it would be a small step in that direction.

In his State of the Union address, Obama said,Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together.So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we.Lets take their advice and free our families and businesses from the painful spikes in gas prices weve put up with for far too long.

The idea is the brainchild of the small Washington think tank Securing Americas Energy Future (SAFE), which published a report in December recommending the creation of the trust fund although the SAFE proposal recommends funding the research through revenues generated by new, rather than existing offshore drilling. SAFEs board of directors is headed by Fred Smith, the former Republican senator and CEO of FedEx Corp., and retired Marine Corps General P.X. Kelley the pair mentioned in Obamas speech.

On Dec. 3, the same day SAFE published the report, the groups CEO, Robbie Diamond, met with both White House senior energy advisor Heather Zichal, and with the staff of Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy Committee. Both the Democratic White House and the GOP senator liked the idea - and have since met to talk about moving it through Congress.

Because of the bipartisan support for this program, we feel confident that our conversations with the Hill will be more fruitful, Zichal told reporters in a conference call on Thursday. We feel really good about the partners we have, Zichal said. The week before Obamas State of the Union address, Murkowski unveiled an energy blueprint that also included a plan similar to SAFEs energy trust fund - although key to the Republican plan was a reliance on revenue from new oil drilling, as the original SAFE plan had called for.

And Murkowskis trust fund would fund all forms of energy research, not just advanced auto technology.

The president hit on a good idea when he called for a trust fund to promote energy innovation, said Robert Dillon, a spokesman for Murkowski. But unlike Sen. Murkowskis proposal, he would not enable new energy production to pay for it. 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. The only other source would be new taxes. Theres a better way that not only funds investment in research, but also addresses our need for affordable and abundant energy. Its Sen. Murkowskis plan. We hope the president will embrace it.

SAFE CEO Diamond who will be present at the presidents speech today, thinks those differences are surmountable.

The Republicans want to do this by expanding energy production - and Democrats should be in favor of it because you can have more money for research. Theres clearly room for negotiation, he said.
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