Obama: Spend oil money on alternatives to oil
President Barack Obama speaks to guests during a visit to Argonne National Laboratory on March 15, 2013 in Argonne, Ill. Obama used the event to push for more federally funded research into clean energy technologies. Argonne is the current home of a $120 million federal project to develop smaller, cheaper and more powerful batteries for electric vehicles.
President Obama wants cars and trucks that don’t need oil to run. Today he proposed a fund to help make that happen, a fund with a $2 billion price tag. Which sounds like a lot, at least until you put it in context.
For one, it’s spread out over the next decade, so we’re talking about $200 million each year. And, the pool it’d be pulled from, the royalty revenue from offshore oil and gas drilling, was more than $5 billion last year. So, less than 4 percent.
The White House estimates those revenues will increase over the next several years. Which, Andy Radford, from the American Petroleum Institute, believes is likely. For one, he says, you’ve got rising prices. And, says Radford, “we’ve had some major discoveries in offshore that have been coming on line.” The more oil and gas that gets pumped, and the more it costs, the more the government takes in through the royalty program.
But why spend that extra cash on creating cleaner cars and trucks? Everyone in D.C. is talking about deficit reduction. Why not use it for that?
William Galston from the Brookings Institution says developing alternatives to oil is a public good, and “economists agree that there are certain kinds of what they call public goods that the market left to its own devices won’t supply enough of.”