03/19/2013 05:47 pm ET Updated Mar 19, 2013

Energy Security Trust Proposal From Obama Gets Cool Reception From Democratic Senators

WASHINGTON -- President Barack Obama's alternative-fuel research fund, the Energy Security Trust, while already unpopular with Republicans, is drawing cool responses from Senate Democrats who represent states dependent on fossil fuel production.

The fund, which Obama touted Friday, would put $2 billion from offshore oil and gas drilling revenues over the next 10 years into a research fund for technologies including biofuels, electric vehicle batteries and hydrogen fuel cells.

But Sen. Mark Begich (D-Alaska) says he is "cautious" on the proposal. "We have some ideas on revenue sharing," he told HuffPost at the Capitol on Tuesday. "We want to make sure in his idea that Alaska and other coastal states don't get lopped out of revenue sharing."

His comments echo those of Sen. Mary Landrieu (D-La.), who said in an email to a local paper that she wouldn't back the president's plan unless it allowed for sharing federal offshore drilling revenues with Gulf states.

"As interested as I am in research and development for alternative fuels, I will not be able to support such a proposal without first addressing the inequity that currently exists between interior and coastal states," Landrieu wrote to Baton Rouge's The Advocate. "I am certain that the other current and future energy producing coastal states agree with this position."

Revenue sharing has been a long-standing issue for coastal states, even prior to the current proposal. While inland states can usually claim as much as half the royalties for oil and gas production on land within their borders, coastal states currently do not derive any revenues from royalties charged by the federal government to oil companies that drill offshore. Landrieu has made getting the federal government to share that money with states one of her top legislative goals, and a bill introduced by the senator last session stalled in the Senate's Energy and Natural Resources Committee. She's reviving it again this session with the support of Sen. Lisa Murkowski (R-Alaska).

Four Gulf Coast states -- Louisiana, Mississippi, Alabama and Texas -- are already slated to receive a slice of the revenues starting in 2017 under existing law, but the amount is capped at $500 million annually, per state -- and that does not bring any benefit to the state of Alaska.

The president originally proposed the Energy Security Trust in his State of the Union address as part of the administration's effort to promote energy self-sufficiency. "If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we," he said during the speech. "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."

Asked for an opinion on the proposal Tuesday, Sen. Jeff Flake (R-Ariz.) called it "a bit out there," while Sen. Angus King (I-Maine) said he wasn't intimately familiar with it but liked what he'd heard. "I think research and development is appropriate as we transition away from fossil fuels," he said. "It's going to be about what comes next."

Republicans are likely to oppose Obama's plan unless it's coupled with expanded drilling. "If we could have reasonable drilling on federal lands," said Sen. Orrin Hatch (R-Utah) when asked about the research fund, "this country could become energy sufficient. That would be a step in the right direction."

The White House has said expanded drilling is not under consideration.



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