(Updates with Obama remarks in first six paragraphs.)
March 15 (Bloomberg) -- President Barack Obama urged Congress to create a $2 billion clean-energy research fund with fees paid by oil and gas producers to help lower U.S. dependence on oil.
Speaking in front of a display of high-efficiency automobiles at the Argonne National Laboratory in Lemont, Illinois, Obama said the U.S. risks falling behind countries such as China, Germany and Japan that are increasing spending to find ways to cut energy use and explore alternatives to fossil fuels.
“We can’t afford to miss these opportunities while the rest of the world races forward,” he said.
Obama issued the challenge to Congress at one of the Energy Department’s largest labs for scientific and engineering research. The so-called Energy Security Trust would be funded over 10 years from government fees on offshore oil and gas drilling, according to a White House fact sheet.
The trust would provide reliable funding for research focused on transportation alternatives.
“Few areas hold more promise for creating good jobs and growing our economy than how we use American energy,” Obama said.
The plan, which Obama described last month in the State of the Union address, wouldn’t open new offshore areas to drilling. Revenue for the trust would come from accelerating permit approvals for oil and gas producers, which would increase production and boost receipts from royalties, lease sales and bonus bids.
Congress has weighed similar proposals in the past. In 2009, Republicans led by now House Speaker John Boehner of Ohio, introduced an energy bill that would have directed money from oil and gas lease sales to pay for clean-energy programs as a counter to climate-change legislation backed by Democrats.
Another plan, offered by Alaska Senator Lisa Murkowski, the top Republican on the Energy Committee, would generate revenue from drilling on lands that are now off limits, such as the Arctic National Wildlife Refuge in Alaska. A White House official who briefed reporters yesterday said Obama’s proposal wouldn’t open the refuge to exploration.
The energy fund would be dedicated to basic research that the private sector is typically reluctant to take on, the official said. The groundwork for hydraulic fracturing, a drilling technique that has revolutionized oil and gas production, was laid decades ago by government-funded research, the official said.
While the trust will focus on transportation, it will support research into a variety of fuels and technologies, the official said.
Obama said the trust would provide a public pipeline for research, because some ideas are too risky for private enterprise.
“The private sector on its own won’t invest in this research because it’s too expensive, it’s too risky, they can’t afford it,” he said. “So we’ve got to support it, and we’ll all benefit from it.”
After posting what some critics said were mixed results on environmental issues in his first term, the president energized environmental groups with a pledge in his inaugural address this year to “respond to the threat of climate change.” The energy fund would build on administration accomplishments that have reduced oil imports and lowered greenhouse-gas emissions, the White House official said.
Energy development and mineral mining on U.S. lands and offshore raised about $12 billion for state and federal governments in fiscal year 2012, according to the Office of Natural Resources Revenue, a division of the Interior Department. That was about $1 billion more than the previous year as advances such as hydraulic fracturing are giving oil and gas producers more access to reserves trapped in shale-rock formations.
Most-read alternative energy stories: MNI ALTNRG <GO> For top news on renewable energy: TOP ENV <GO> New Energy Finance news and analysis: BNEF <GO>
--With assistance from Jim Snyder, Roger Runningen and Joe Sobczyk in Washington. Editors: Joe Sobczyk, Ann Hughey