In his weekly address President Obama turned to energy, a topic we’re finally hearing him talk more about.
He spoke about the need to get our transportation system off oil, and his plan to further that through an "Energy Security Trust," which he first alluded to in the State of the Union address.
The idea is to simply route some royalties from oil and gas drilling on public lands into investments that advance clean fuels.
The Trust would be funded with $2 billion from royalties over the next decade, to be used for research on advanced transportation technologies such as fuel cells, electric and natural-gas vehicles, and biofuels.
It wouldn’t add "a dime to the deficit," Obama pointed out, and we need to keep supporting innovation during this time of extreme budget cuts. It would support American ingenuity with the goal of drivers being able to "go coast-to-coast without using a drop of oil."
Rising gasoline prices are akin "to getting hit with a new tax" at a time when American’s can least afford it. "The only way we’re going to break this cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good," he said. "It’s not just about saving money. It’s also about saving the environment. But it’s also about our national security."
Obama also said his administration plans to accelerate oil and gas permits to raise production.
Royalties for mining and energy development added up to $12 billion in 2012, according to the Office of Natural Resources Revenue, a division of the Interior Department. That’s $1 billion more than 2011 because of increased natural gas fracking on public lands.
Norway is doing exactly this, using income from oil production to fund the transition away from oil. Instead of using royalties, however, oil companies must pay a carbon tax. The proceeds fund a wide range of initiatives, including the same $2 billion to expand public transport and facilitate the transition to electric cars – in a country that pales in size to the US.
Oil & Gas Production on Federal Lands
Although many business leaders support this concept, Republicans will resist it. In their Continuing Resolution, an amendment would kill the Department of Defense use of biofuels, which they consider a waste of money (Senate votes this week on this).
But if they can extract concessions, perhaps they’d be interested. "For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically," said Brendan Buck, a spokesman for House Speaker John Boehner (R-OH).
The big target is the Arctic National Wildlife Refuge and offshore oil drilling along every coast, as they propose in each energy plan.
"Unfortunately, this administration has consistently slowed, delayed, and blocked American energy production," said Buck.
That’s not true, of course.
As of the end of 2011, 70 of the largest oil and gas companies hold leases for at least 141 million acres of public land – the size of California and Florida combined – and more than 6% of the country, according to an analysis by the Natural Resources Defense Council.
And more than 100 companies actively drilling in the Gulf of Mexico don’t even pay royalties to the US government, according to a report released by Rep. Ed Markey (D-MA), "Oil for Nothing… And Gas for Free: Royalty Breaks for Big Oil Cost America Billions."
These royalty breaks add up to $11 billion in lost revenueand could total over $15.5 billion over the next decade (while putting our resources at great risk).
In November, Interior announced a plan for fracking on public lands, leaving 677,000 acres open for development.
US oil production is surging so much and so quickly that the US could soon overtake Saudi Arabia as the world’s biggest producer.
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This is a good plan by the Obama administration. We cannot rely on oil and gas all the time because there may be depletion of such resources. With the country experiencing a decline in economy, it is hard to keep up with price hikes.