Thinking Outside the Box: Obama's Energy Security Trust
- Mar 18, 2013 11:00 pm GMT
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In an address at Argonne National Laboratory, President Obama proposed the creation of an Energy Security Trust. The Trust would use $2 billion from royalties and lease payments received from oil operations on federal lands over the next ten years to fund research aimed at replacing oil as a transportation fuel. Technologies mentioned by the President as eligible for funding would include electric vehicles, biofuels, fuel cells and natural gas vehicles.
It was unclear in the President’s proposal whether these royalty payments would come from existing oil leases on federal lands or from new leases, which the government might agree to make available. The Administration’s past reluctance to expand oil production on federal lands has, of course, been a major Republican complaint. Although the President offered no deal with respect to expanded drilling–and probably pointedly so–it is hard to ignore the obvious implication. Significantly, Alaska Senator Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, has already suggested that she might be able to support the idea. Perhaps this is a deal that Congress can actually get done?
The Energy Security Trust is a good idea. It is a good idea, not just because it will fund important energy research, including research in advanced battery technology, but because it is scrappy: it identifies a novel way to generate revenue for an important public purpose, which revenue might not otherwise exist. The President specifically credited the Washington advocacy group Securing America’s Future Energy with the idea of the Trust. Finding money for energy technology development from new and creative sources will need to be an important priority in the federal budget-constrained world of the future.
In a round-about way, the President made a similar point in his address at Argonne. In his remarks, the President heavily criticized the current federal budget sequester, citing a recent article in The Atlantic magazine co-authored by Eric Isaacs, Argonne’s Laboratory Director. The article outlines how the sequester will do great, long-term harm to important scientific research.
While the President confined his point to criticism of the sequester and his antagonists in Congress, the issue is, in fact, a larger one that just the sequester. The development and deployment of new energy technology in the United States has been chronically underfunded. As the American Energy Innovation Council recently noted, the U.S. government spent about $5 billion on energy research in 2010 (including one-time stimulus funding) compared to about $30 billion for medical research and $80 billion for defense research. Moreover, that underfunding promises to become even more severe as Congress moves to address the federal deficit and as growing entitlement obligations increasing squeeze discretionary outlays, such as energy research, for remaining government funds.
We need to start thinking outside the box to find new ways to fund investments in the infrastructure upon which the future prosperity of our country and our world depends. Energy technology is a key part of that infrastructure. The Energy Security Trust is a good and creative start. But we must actively look for new ideas and new opportunities.