Washington (Platts)--13Feb2013/324 pm EST/2024 GMT

An independent energy advocacy group Wednesday said there is bipartisan support for an energy research trust fund proposed by US President Barack Obama in his state of the union address to Congress.

Obama Tuesday night advocated an idea first advanced in December by Securing America's Future Energy, a coalition of corporate CEOs and former military officers. Obama proposed the creation of an Energy Security Trust, funded by revenues from oil and gas leasing on public lands, to back research on alternatives to oil for powering the nation's transportation fleet.

"If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we," Obama said. "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."

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The group confirmed Wednesday that Obama was referring to SAFE and their plan to take no more than $500 million from the $5 billion generated annually by oil and gas production on federal lands to fund pure research.

"We're not advocating any new taxes or fees on oil companies," SAFE President and CEO Robbie Diamond said during a conference call with reporters. "We're talking about money the government receives anyway."

The group has suggested that the fund be administered by the Department of Energy and used to develop projects such as increasing the capacity of batteries on electric vehicles, and boosting onboard storage of natural gas in cars.

The fund would focus on short-term projects that have the best chance of being introduced to consumers, SAFE executives said.

"It's going to have to offer consumers a product that is both comparable to oil and meets their needs," Diamond said.

The fund will have to satisfy critics who in the past have opposed alternative energy technologies that they say only exist because of government subsidies or mandates. Federal requirements for the blending of cellulosic ethanol, made from non-food feedstocks, is one such technology under attack because the fuel is not being made in commercial quantities.

Diamond said the fund is not intended to "pick winners and losers" among competing technologies, but to foster development of alternatives that would have to compete on their own for consumer acceptance.

The group said that the fund would have to be created by legislation, and pointed to a proposal for a similar fund from Republican Senator Lisa Murkowski from Alaska, the ranking member of the Senate Energy and Natural Resources Committee.

Murkowski said Wednesday that the trust fund is an "idea I may agree with."

"Under my Advanced Energy Trust Fund proposal, new production on previously closed federal lands could provide a substantial source of new revenue to fund research on the most promising new energy technologies, while paying down the national debt," Murkowski said in a statement. "I intend to get to work on this as soon as possible."

--Gary Gentile, gary_gentile@platts.com
--Edited by Carla Bass, carla_bass@platts.com

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