Obama Turns Focus To Research In First Energy Speech Of Second Term

U.S. President Barack Obama will try to turn the page on bitterly partisan fights over energy policy on Friday, focusing his first energy speech of his second term on proposing a modest new fund to support research.

* In research plan, some common ground on energy policy

* Would put $2 bln over 10 yrs to alternative transportation research

* Money would come from royalties from offshore drilling

* But drilling would not expand, and leases may be tightened

U.S. President Barack Obama will try to turn the page on bitterly partisan fights over energy policy on Friday, focusing his first energy speech of his second term on proposing a modest new fund to support research.

Obama will tour the Argonne National Laboratory outside of Chicago known for its groundbreaking research into advanced batteries used in electric cars, and will talk about the need to find more ways to wean cars and trucks off oil, White House officials said.

Obama is proposing a fund that will draw $2 billion over 10 years from royalties the government receives from offshore drilling in the Outer Continental Shelf.

The research would be aimed at new ways to lower the cost of vehicles that run on electricity, biofuels, natural gas or other non-oil fuel sources.

"It squirrels away a set of resources that even in a difficult budgetary environment, will give researchers in the private sector certainty," a White House official told reporters ahead of Obama's trip.

The United States has a newfound wealth of oil and natural gas resources made possible by hydraulic fracturing or "fracking" and other drilling advancements, but consumers still face high prices at the pumps because gasoline prices are tied to world markets.

Obama first mentioned the "Energy Security Trust" fund in his State of the Union address last month, pitching it as a way to "free our families and businesses from the painful spikes in gas prices we've put up with for far too long."


By choosing to focus his first energy speech on research - an issue that appeals equally to Republicans and Democrats, industry and environmental groups - Obama is seeking to build some common ground on energy, which has been an extremely divisive policy issue.

In his first term, Obama had pushed for new laws that would use market forces to reduce climate-changing carbon pollution, but the so-called "cap and trade" bill was opposed by industry and failed in Congress.

His administration pumped $90 billion in economic stimulus funds into clean energy and "green jobs" projects, helping to dramatically expand renewable energy production in America.

But some projects failed, including a California solar panel maker called Solyndra that had received $527 million in a government loan.

Republicans excoriated his administration for that failure, as well as for delaying approval of the Keystone XL crude oil pipeline from Canada.

In his second term, Obama has so far earned plaudits from environmental groups for elevating climate change as one of his top priorities. He warned lawmakers he would look for ways to take action, if they don't.

Green groups want him to push for new regulations on coal-fired power plants. They are also pushing him to reject the Keystone pipeline in a final decision on the project due sometime later this year.

Pipeline activists were planning to protest outside the Argonne laboratory during Obama's visit.


The research trust fund will require consent from Congress. Lisa Murkowski, the top Republican senator on the Senate Energy Committee, had proposed a similar idea for a trust fund.

But her proposal called for expanded drilling, which is not part of Obama's plan.

"As we look to those areas offshore that are open for development, the administration has no plans to modify or change the decisions that we've made with the existing Outer Continental Shelf plan for 2012 to 2017," a White House official said, noting the Arctic National Wildlife Refuge is also off limits.

The plan also comes as Congress grapples with budget cuts. White House officials said it would not add to the deficit.

Officials told reporters they expect leasing revenues to grow in coming years for several reasons, including because of changes the administration plans to make to leasing policy.

The administration plans to propose "more diligent development of oil and gas leases through shorter primary lease terms, stricter enforcement of lease terms, and monetary incentives to get leases into production," a fact sheet provided by the White House said.