ENERGY POLICY:

Obama vows quicker permitting, urges infrastructure and alt vehicle funding

President Obama called for a variety of energy initiatives during his State of the Union address last night, including expedited oil and gas permitting, increased funding for infrastructure and new investments in alternative fuel vehicles.

Obama also touted successes of the last four years -- more domestic oil production, decreased emissions and increased fuel efficiency -- while urging a boost in renewable energy and new energy conservation efforts. Echoing his remarks in last month's inaugural address, the president also gave significant attention to climate change in his hourlong speech (see related story).

"After years of talking about it, we are finally poised to control our own energy future," Obama said.

Obama called first for a greater commitment to wind- and solar-generated energy.

"Last year, wind energy added nearly half of all new power capacity in America," he said. "So let's generate even more. Solar energy gets cheaper by the year. Let's drive down costs even further. As long as countries like China keep going all-in on clean energy, so must we."

He also praised the "natural gas boom" that "has led to cleaner power and greater energy independence."

"That's why my administration will keep cutting red tape and speeding up new oil and gas permits," Obama said. "That's got to be part of an all-of-the-above plan. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and our water."

Obama proposed a "Fix-It-First" program to address infrastructure repairs nationwide, citing nearly 70,000 structurally deficient bridges across the country. He also suggested a "Partnership to Rebuild America" that would "attract private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children."

"Ask any CEO where they'd rather locate and hire, a country with deteriorating roads and bridges or one with high-speed rail and Internet, high-tech schools, self-healing power grids," he said.

The president added that members of Congress should back the projects because they would bring jobs: "And I know you want these job-creating projects in your district; I've seen all those ribbon-cuttings."

Obama set a new target for increased energy efficiency.

"I'm also issuing a new goal for America: Let's cut in half the energy wasted by our homes and businesses over the next 20 years," he said. "The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen."

He also mentioned an executive order he signed yesterday on cybersecurity, saying "our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air traffic control systems" (see related story).

New fund for alt vehicles

The president called on Congress to create an Energy Security Trust, an idea authored by the nonprofit group Securing America's Future Energy that would utilize some oil and gas revenues from federal lands to fund research into alternative fuel vehicles.

"In fact, much of our newfound energy is drawn from lands and waters that we, the public, own together," Obama said. "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 nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we," Obama said, referring to SAFE's Energy Security Leadership Council, which is chaired by FedEx Chairman Frederick Smith and former Marine Corps Commandant Gen. P.X. Kelley.

According to a December report from the Energy Security Leadership Council, the proposal calls for a portion of new revenues from expanded oil and gas drilling both Alaska and the outer continental shelf -- a subject the president did not broach during his speech last night -- to be dedicated to transportation-related research projects.

The group's proposal, which recommended research to focus on electric and natural gas vehicles, also called for the Department of Energy to make annual reports to Congress on the fund.

"The oil boom has created a unique opportunity to have our cake and eat it too. We can use part of the revenue generated from expanded oil production to fund the research and development of the alternative fuels and vehicles required to end America's oil dependence," SAFE President Robbie Diamond said in a statement. "This fund must be laser-focused on the oil displacement technologies that will create true competition in the transportation sector."

But whether Congress will seize on the proposal, particularly given the significant criticisms House Republicans have lobbed at other Energy Department programs in recent years, remains to be seen.

"I don't think that's necessary," Rep. Lee Terry (R-Neb.), a member of the House Energy and Commerce Committee, said following the speech. "I'm not saying there won't be use for that money. For example, we floated using that in transportation. We could build the bridges he wants with it. But there are enough private dollars sitting on the sidelines in alternative fuels, especially for transportation, especially natural gas, that you won't need to shove that money, the oil money or natural gas royalties, into an energy fund like that. The private dollars are there. I'm very confident of that from talking to a lot of people who are holding their capital back until there is certainty."

Support for proposals

Sen. Marco Rubio (R-Fla.), in the official Republican response to the president's speech, raised the specter of the bankrupt California solar firm Solyndra, a favorite GOP punching bag when criticizing government-funding for alternative energy projects (see related story). But the opportunity for expanded oil and gas drilling could generate some bipartisan support.

Sen. Mark Udall (D-Colo.), chairman of the Energy and Natural Resources Subcommittee on National Parks, said he would need to review specific proposals, but would be open to additional drilling and energy production.

"It makes sense to reinvest royalties from finite energy sources; that's been a fundamental principle now for 50 years or more," Udall said, but added of new drilling sites: "We have to do it in a way that doesn't sacrifice public health."

Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.) likewise said lawmakers would need to review the proposal's details: "But it seems to me in that area he was certainly signaling that there is a need for royalty reform. And I think you are going to see bipartisan interest."

BlueGreen Alliance Executive Director David Foster also offered support for the new fund, noting that in his home state of Minnesota, taxes on iron ore mines have long been used to fund economic development and diversification.

"I was pleased to see a mention of that, because I've thought for a long time myself that one of the smartest things we should be doing with revenues from depletable resources is channeling them back into the future," Foster said. "To design vehicles that get us off oil, that's the kind of common-sense approach to the problem of resource depletion and climate change that we need in this country."

American Petroleum Institute President Jack Gerard did not comment specifically on the fund proposal but did urge the president to open additional federal land to oil and gas development.

"President Obama recognized the oil and natural gas industry as a robust economic engine that is investing in American jobs, generating billions of dollars for the government each year, and making our country more energy secure," Gerard said. "Even with the aggressive expansion of renewable and alternative energy, oil and natural gas will continue to provide the majority of the energy necessary to heat our homes, run our businesses, and fuel our cars for decades to come. We're going to need all sources of energy to fuel a growing economy."

Reporters Phil Taylor and Manuel Quinones contributed.

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