Obama seeks energy trust to shift cars, trucks 'off oil for good'
Obama: "Let's ... free our families and businesses from the painful spikes in gas prices we've put up with for far too long."
Photo credit: BLOOMBERG
WASHINGTON -- President Obama on Tuesday called for the creation of an "Energy Security Trust" that would fund the development of new vehicles "to shift our cars and trucks off oil for good."
The proposal, outlined in his State of the Union address and coming at the start of Obama's second term, suggests the White House will redouble its support for electric vehicles and biofuels, which received significant government funding and tax credits during the president's first term.
Jobs in alternative energy and sales of plug-in hybrids and battery-electric vehicles have lagged behind the Obama administration's early hopes, though combined U.S. sales of EVs and plug-in hybrids tripled in 2012 to about 53,000.
Some companies that received government support -- such as battery-maker A123 Systems -- have filed for bankruptcy protection. And electric-car producer Fisker Automotive has been forced to suspend some operations because of funding woes.
Rather than providing more tax credits and loan guarantees to spur alternative-energy use and commercialization, Obama said he would use revenue from oil and gas drilling to fund research.
Earlier in the speech, Obama highlighted one potential topic of study: new materials that would make batteries 10 times more powerful.
"If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we," Obama said of the proposed trust. "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."
Materials and documents released by the White House before the speech provide more specifics about the proposal.
It says the United States will continue to rely on fossil fuels "in the near term," but President Obama wants a transition over time to alternatives that include "advanced vehicles that run on electricity, homegrown biofuels, and vehicles that run on domestically produced natural gas."
The Obama administration has already proposed tougher rules that raise fuel-economy requirements for automakers to 54.5 mpg by 2025. Automakers are expected to rely on EVs and other alternative fuels to help meet those goals.
Focusing mostly on the economy during the speech, Obama also set out his priorities for the tax-reform talks that are expected to begin on Capitol Hill this year.
He said he wants to lower the corporate tax rate and set an even lower rate for manufacturers -- moves that would benefit automakers and auto suppliers with U.S plants.
The manufacturing sector, and auto industry in particular, have added jobs and become a bright spot in the U.S. economy.
Obama also vowed to begin talks on a trade agreement with the European Union and to complete the Trans-Pacific Partnership, a trade deal with countries around the Pacific Rim that has become controversial within the auto industry.
Detroit automakers have lobbied the Obama administration to exclude Japan from the talks, claiming Japan has weakened its currency to help automakers while setting up barriers to American-made vehicles.
Obama did not mention the federal government's 2009 bailouts of General Motors and Chrysler during the speech, though he noted sales of American-made cars have rebounded to their highest level in five years. And he noted that Ford Motor Co. has moved jobs from Mexico to the United States.
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