Obama to announce plans to fund alternative fuel research

President Obama is expected to announce new energy plans Friday. (Mandel Ngan / AFP-Getty Images / March 13, 2013)

By Neela Banerjee

March 15, 2013, 3:00 a.m.

WASHINGTON — President Obama plans to announce Friday that he will ask Congress to create an energy security trust to fund research into alternatives to gasoline, according to senior White House officials.

The $2-billion fund to be disbursed over 10 years would come from increased revenue the administration expects from streamlining the permitting process for drilling, and from higher oil and gas production in the Gulf of Mexico, the officials said.

The role of the trust, which will be in the president's budget proposal, would be to support cutting-edge research into fuels that would eventually replace gasoline, a prospect that the officials conceded was years away. They added that no new territory would be added to federal lands already set aside for energy development. Revenue channeled to the trust would be on top of revenue already expected from federal lands, and would not take money out of other government coffers to put to this project, they said.

The announcement, which Obama will make during a visit to the Argonne National Laboratory near Chicago, builds on an idea he floated during his State of the Union speech to boost energy self-sufficiency as domestic production increases and demand falls.

“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,” Obama said in the State of the Union address. “Let’s … free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long.”

The announcement comes against the backdrop of high gasoline prices nationwide. It also arrives as the White House grapples with issuing a permit to build the controversial Keystone XL oil pipeline from Canada to Texas. A recently completed State Department environmental study concluded that the pipeline would have minimal effect on the environment, increasing the chances of the project’s approval. A project like the trust aimed at weaning the country off gasoline might be offered as a way to mute criticism from environmentalists before a decision on Keystone XL.

The White House officials said the idea for the trust came from a group of corporate chief executives and former military officers.

In a telephone news conference, the White House officials indicated that the trust would fund research at government laboratories, universities and private companies, similar to the Energy Department’s Advanced Research Projects Agency — Energy.

Margot Anderson, executive director of the energy project at the Bipartisan Policy Center, a Washingtion research group, said others had suggested similar initiatives to redirect revenue from energy development on public lands to new research, including Sen. Lisa Murkowski (R-Alaska), the ranking member of the Senate Energy and Natural Resources Committee.

Anderson said they had inevitably become ensnared in discussions about opening more land to drilling or giving less revenue to the federal budget, politically unappealing alternatives in Washington.