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Enviros hoping for details on President Obama's promised biofuel push got a few answers yesterday in the president's new budget, which still left some questions as to how the administration plans to pay for expensive new biofuels research. The budget indicates the Interior Department may charge the fossil fuel industry more to drill on public lands, a plan that already had Republicans bristling when the president hinted at it last month.
In mid-March, in a speech at Illinois' Argonne National Lab, Obama pitched an Energy Security Trust, which would collect $2 billion in additional revenues by 2020 from oil and gas companies that drill on federal land, and invest the funds in R&D for cutting-edge biofuels and clean vehicles. According to the Interior Department, these royalties totaled roughly $7.9 billion in FY 2012.
The speech left unclear the question of how an additional $2 billion in royalties could be raised without either raising royalty rates—a non-starter for the fossil fuel industry—or allowing more drilling on more public lands. A White House spokesman was quick to rule out expanded drilling in Alaska, but left the possibility elsewhere. A Climate Desk calculation reviewed by MIT-based energy blogger Jesse Jenkins found that to raise an additional $2 billion in royalties through expanded drilling alone, oil and gas development on public land would need to increase by 1.5 percent and 7.2 percent, respectively, by 2020.
"You certainly don't gain anything by promoting clean energy that ends up promoting the production of more dirty energy sources," NRDC policy analyst Bob Deans told Climate Desk last month.
Deans had hoped that today's budget would clear things up. While the proposal doesn't mention the Energy Security Trust by name, it calls for unspecified adjustments to royalty rates that The Hill reports would be redirected from the general treasury toward the Trust. An Interior Department spokesperson said that annual oil and gas income to the government is projected to rise by $2.8 billion by 2023, but was unsure whether this money would come from new public land drilling or solely via increased royalties.
The budget also carves out $2.3 billion for the Energy Department's Office of Energy Efficiency and Renewable Energy, which oversees R&D on advanced biofuels (as well as solar, wind, and other clean energy research), but doesn't specify how much of that would go toward biofuels specifically, or whether these funds are in addition to the $2 billion for the Energy Security Trust. A White House spokesperson did not return repeated calls for comment.