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Can Obama's Energy Trust Fund Idea Gain Traction in Congress? Can Obama's Energy Trust Fund Idea Gain Traction in Congress?

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Energy

Can Obama's Energy Trust Fund Idea Gain Traction in Congress?

President Obama got behind the wheel of an electric Chevy Volt during his tour of the General Motors plant in Hamtramck, Mich., in July 2010. (AP Photo/Pablo Martinez Monsivais)

photo of Coral Davenport
March 15, 2013

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 nation’s energy systems is slim to nil.

But a few cracks are emerging in that deadlock, with genuine bipartisan support gathering around a cluster of ideas linking energy priorities from both parties, such as offshore drilling and offshore wind power. The ideas aren’t 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, 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 Department’s 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 of an energy trust 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 nation’s dependence on oil – and its global-warming emissions. It won’t be 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 newfound 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 nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long.”

The idea is the brainchild of the small Washington think tank Securing America’s Energy Future, 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. SAFE’s board of directors is headed by Fred Smith, the former Republican senator and former CEO of FedEx Corp., and retired Marine Corps General P.X. Kelley – the pair mentioned in Obama’s speech.

On Dec. 3, the same day SAFE published the report, the group’s CEO, Robbie Diamond, met with both White House senior energy adviser Heather Zichal, and with the staff of Alaska's 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 Obama’s State of the Union address, Murkowski unveiled an energy blueprint that also included a plan similar to SAFE’s 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 Murkowski’s 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. Murkowski’s 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. There’s a better way that not only funds investment in research, but also addresses our need for affordable and abundant energy. It’s Sen. Murkowski’s plan. We hope the president will embrace it.”

SAFE CEO Diamond – who will be present at the president’s 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. There’s clearly room for negotiation,” he said.

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