With Washington in political gridlock over spending, President Barack Obama traveled Friday to Argonne National Laboratory to announce an energy proposal that would secure money for advanced vehicles by diverting federal revenue from offshore oil and gas production.
Using the pre-eminent Chicagoland research facility as a backdrop, Obama pitched the $2 billion, 10-year trust as a way to wean Americans off oil by securing the development of cars and trucks that run off of electricity, homegrown biofuels and natural gas.
"The only way to really 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," Obama told a group of Argonne employees, business leaders and elected officials after he toured the lab's Center for Transportation Research.
But while Obama's visit ostensibly was to promote the Energy Security Trust — first mentioned in his State of the Union address last month — he also used the trip to continue White House warnings over the effects of across-the-board automatic budget cuts, known as sequestration.
"I just want to be clear — these cuts will harm, not help, our economy," said Obama, citing an opinion piece that the director of Argonne recently co-authored on how the budget cuts may affect U.S. science research. "They aren't the smart way to cut our deficits."
Argonne officials are still uncertain about how the facility specifically will be affected by the sequestration cuts, but it could lose about $30 million to $35 million from its roughly $800 million operating budget, said Mark Peters, deputy laboratory director for programs.
In a conference call with reporters before the Argonne visit, White Office officials touted the energy trust as a way to move, even in a small way, beyond the whims of the annual appropriations process.
"It squirrels away a set of resources that even in a difficult budgetary environment will give researchers (and) the private sector certainty that investments that will lead to breakthrough technologies are going to be made," a White House official said.
The idea, which Obama said came from a group of corporate chief executives and former military officers, would set aside royalty revenues from oil and gas development in federal waters of the outer continental shelf. The administration believes that leasing revenues from those areas will increase in the coming years — due, in part, to efforts aimed at streamlining permitting.
The proposal also arrives as the White House grapples with issuing a permit to build the controversial Keystone XL oil pipeline from Canada to Texas.
A recently completed State Department environmental study concluded that the pipeline would have minimal effect on the environment, increasing the chances of the project's approval.
A project like the trust aimed at weaning the country off gasoline might be offered as a way to mute criticism from environmentalists before a decision on Keystone XL.
Under the proposal, no new territory would be added to federal lands already set aside for energy development, White House officials said, indicating that the money would flow to research at government laboratories, universities and private companies.
"This is not a Democratic idea or a Republican idea," Obama said. "This is just a smart idea."
It will, however, require the support from both Democrats and Republicans to pass through Congress — a challenging possibility in the current political climate.
"For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically," said Brendan Buck, spokesman for House Speaker John Boehner, a Republican. "Unfortunately, this administration has consistently slowed, delayed and blocked American energy production."
Sen. Dick Durbin, D-Ill., who traveled with the president from Washington to attend the Argonne event, called the trust a logical proposal that links the money coming off of public lands for gas and oil exploration to new energy research.
But he acknowledged the funding model could run into political snags.
"Frankly, there's going to be resistance from the oil companies and maybe from some who would like to see this money devoted to other purposes," Durbin said.
Dizikes is a Tribune reporter; Banerjee is with the Tribune's Washington Bureau. Tribune reporter Rick Pearson contributed.Copyright © 2015, CT Now