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U.S. Clean Energy Research To Be Paid For With Federal Oil And Gas Lease Revenue, Obama Proposes

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LEMONT, Illinois (AP) — President Barack Obama on Friday spoke of future cars that can go "coast to coast without using a drop of oil" and urged Congress to authorize spending $2 billion over the next decade to expand research into electric cars and biofuels to wean automobiles off gasoline.

Obama said the United States must shift its cars and trucks entirely off oil to avoid perpetual fluctuations in gas prices. Citing policies that already require automakers to increase gas mileage, he said he expects that by the middle of the next decade, Americans will only have to fill up their cars half as often.

"The only way to break this cycle of spiking gas prices — the only way to break that cycle for good — is to shift our cars entirely, our cars and trucks, off oil," the president said, speaking at Argonne National Laboratory.

The White House says energy is one of Obama's top agenda items for his second term. That focus, however, has been overshadowed as the administration and Congress work on an immigration overhaul, gun legislation and deficit-reduction measures.

Obama also cast his proposal as one meant to create opportunities for economic growth.

"I want the next great job-creating breakthroughs, whether it's in energy or nanotechnology or bio-engineering, I want those breakthroughs to be right here in the United States of America," he said.

His initiative, proposing to spend $200 million a year on research, would be paid for with revenue from federal oil and gas leases on offshore drilling, and the White House said it would not add to the deficit.

The money would fund research on "breakthrough" technologies such as batteries for electric cars and biofuels made from switch grass or other materials. Researchers also would look to improve use of natural gas as a fuel for cars and trucks.

Obama's motorcade passed a couple dozen protesters against the proposed Keystone XL pipeline, which would transport oil from Canada's tar sands to U.S. Gulf Coast refineries. The Obama administration is considering whether to clear the project.

White House spokesman Josh Earnest told reporters aboard Air Force one that "there's no question" that the types of green energy initiatives the president was talking about would have more impact on climate change than whether Keystone is built.

Obama's proposal is modeled after a plan submitted by a group of business executives and former military leaders who are committed to reducing U.S. oil dependence. The group, called Securing America's Future Energy, or SAFE, is headed by FedEx Corp. Chairman and CEO Frederick W. Smith and retired Marine Corps Gen. P.X. Kelley.

Creation of the trust would require congressional approval at a time of partisan divide over energy issues. Republicans have pushed to expand oil and gas drilling on federal land and water, while Obama and many Democrats have worked to boost renewable energy sources such as wind and solar power.

White House officials said the president's proposal would not require expansion of drilling to federal lands or water where it is now prohibited. Instead, they are counting on increased production from existing sites, along with efficiencies from an administration plan to streamline drilling permits. The government collects more than $6 billion a year in royalties from production on federal lands and waters.

A spokesman for House Speaker John Boehner said Obama needs to expand drilling to get his support.

"For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically," the spokesman, Brendan Buck, said. "Unfortunately, this administration has consistently slowed, delayed and blocked American energy production."

Obama's push for the energy trust came as the Environmental Protection Agency released a report Friday indicating that fuel economy standards rose last year by 1.4 miles per gallon (3.7 liters), the largest annual increase since EPA started keeping track. The agency said the improvement was due to better availability of high-performing cars and more options for consumers.

A spokeswoman for the Alliance of Automobile Manufacturers said the group supports efforts to make diverse fuels more available but said improved transportation infrastructure, such as additional charging stations for electric cars and greater availability of clean diesel fuel, also is needed.

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Associated Press writers Nedra Pickler and Matthew Daly contributed.

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