SOTU speech supports SAFE energy program

SOTU Jan 27, 2014
SOTU Jan 27,2014. (Official White House Photo by Amanda Lucidon)

PRESS RELEASE January 28, 2014

White House Continues Support for an Energy Security Trust to Combat American Oil Dependence

Washington, D.C. – Securing America’s Future Energy (SAFE) applauds the White House’s continued commitment to improving American energy security and protecting our economy by linking supply and demand policies to combat our country’s oil dependence. The White House’s version of an Energy Security Trust Fund (ESTF) is again included in this year’s State of the Union’s broader set of proposed policies. President Obama continues to propose funding the Trust with $200 million annually in mandatory spending transferred directly from federal royalty revenue generated by oil and gas production.

As the author of a similar policy that inspired the President’s proposal, SAFE has proposed the establishment of an Energy Security Trust Fund that would use revenues from oil and gas development on federal lands and waters currently unavailable to the industry to pay for research and development (R&D) of technologies that have the potential to significantly displace oil in the transportation sector, such as improvements to electric vehicle batteries and compressed natural gas (CNG) storage tanks.

After topping $900 billion in 2012, American spending on petroleum fuels remains at near-record levels. Oil dependence continues to pose a severe threat to America’s economy and national security, tying our fate to the highly unpredictable, cartel-influence global oil market.

The Energy Security Trust Fund concept enjoys bipartisan support and is under active consideration on Capitol Hill. Senator Lisa Murkowski (R-AK), Ranking Republican on the Energy and Natural Resources Committee, has released a detailed energy policy blueprint endorsing an approach similar to SAFE’s.

SAFE is encouraged by continued support for the Energy Security Trust Fund and looks forward to the next steps in advancing American energy security.

Key facts about the Energy Security Trust Fund:

What is the Energy Security Trust Fund?

  • SAFE proposed the creation of an Energy Security Trust Fund (ESTF) in its National Strategy for Energy Security, which was released in December of 2012.
  • The fund creates a mechanism to harness revenues from expanded domestic energy production in order to invest in developing the transportation technologies and fuels of the future.
  • President Obama proposed the creation of a similar policy, an Energy Security Trust, in his 2013 State of the Union address and cited SAFE’s Energy Security Leadership Council as the source of his idea. Although the source of funding is different between SAFE and the President’s proposals, the use of oil revenues to fund breakthroughs in transportation is a common theme in both versions.

How would the Fund be seeded?

  • SAFE has proposed that the ESTF be seeded with revenues from oil and gas development on federal lands and waters that are currently unavailable to the industry, up to $500 million annually.
  • President Obama has proposed seeding the Fund from existing royalty streams, up to $200 million annually.
  • Neither proposal would pose any additional financial burden on oil companies.
  • The funding structure should be established as mandatory spending to provide consistent funding to accelerate breakthroughs in technologies that increase America’s energy security.

What should the Fund be used for?

  • The purpose of the fund would be to aggressively invest in research, development and demonstration (R&D) of advanced transportation technologies and fuels.
  • The Fund should be housed and administered by the Department of Energy, and projects will be funded through a competitive, peer-reviewed process.
  • The Fund would not provide direct funding for commercialization activities.
  • The 2011 “Quadrennial Technology Review” asserted that the “DOE is underinvested in the transportation sector, relative to the stationary sector…Yet, reliance on oil is the greatest immediate threat to U.S. economic and national security…”

What is the fiscal impact of the Fund?

  • SAFE’s proposal would not have any fiscal impact because revenues generated by new oil and gas drilling in areas not currently available to the industry are not in the budget.

Who supports the Energy Security Trust Fund?

  • The Washington Examiner endorsed SAFE’s proposal in November 2013: “SAFE has an energy proposal that merits bipartisan support.”
  • Senator Murkowski made a similar proposal in her “Vision 20/20” document and has solicited feedback on her draft legislation.
  • SAFE continues to work with both Democrats and Republicans in the House and Senate and believes that bipartisan and bicameral legislation will be introduced this year.

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