Obama renews pitch for clean energy to reduce oil appetite

WASHINGTON — President Barack Obama on Wednesday announced a goal to cut U.S. reliance on foreign oil by one-third by 2025, saying that demand from growing economies such as China and India probably will force prices up in the long term.

In a speech at Georgetown University, Obama tried to deflect political heat over rising gasoline prices, saying that spikes due to Mideast turmoil may be temporary and that his approach to domestic oil drilling isn't the cause.

The president said he intended to meet his goal partly by increasing domestic oil and gas production while creating incentives for more alternative energy production and reducing consumption through greater fuel efficiency standards.

"We cannot keep going from shock when gas prices go up to trance when they go back down," Obama said. "The United States of America cannot afford to bet our long-term prosperity, our long-term security, on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground."

The president also pushed back hard against accusations that he'd been too aggressive with restrictions in the wake of last year's BP oil spill in the Gulf of Mexico, the worst oil accident in history.

"We just spent all that time, energy and money trying to clean up a big mess," Obama said. "I don't know about you, but I don't have amnesia."

The president said that his administration had approved 39 new shallow-water permits and seven deepwater permits since implementing new safety standards in the wake of the Gulf spill.

Obama's proposals were largely a repeat of ideas he's already promoted. His speech reaffirmed his support for more domestic drilling so long as conditions are safe and for a possible expansion of nuclear power in the wake of higher gas prices, the nuclear crisis in Japan and Republican criticism that he too eagerly courted oil from Brazil on a visit there this month rather than drill for more on U.S. territory.

It also reflected the president's desire to keep up federal investment in alternative energy in the midst of congressional negotiations over how to cut billions of dollars from his proposed 2012 federal budget.

Daniel Yergin, the widely recognized oil historian, said that, politics aside, Obama's goals reflected the possibilities of a changing domestic energy picture.

"Our imports are down to half of our consumption; domestic energy production has increased," Yergin said, noting that there also have been important gains in the efficient use of energy. "There have been some steps forward. Our automobile fleets are getting much more efficient. The picture is not static."

Yergin noted that the president focused a portion of his speech on shale deposits, which if extracted properly could lead to a 50 percent boost in production of natural gas within two decades, benefiting utilities that would use it to provide electricity to consumers and businesses.

The Pew Charitable Trusts reported Tuesday that global investment in clean energy grew to $243 billion in 2010, a 30 percent increase from the previous year. Its report said that China and then Germany had the largest investments, followed by the U.S. The U.S. was No. 1 in 2008 and second in 2009.

There's currently no shortage of global oil supplies, however. Spare production capacity is thought to be around 4 billion barrels per day.

Obama said that in any case the nation held just 2 percent of the world's proven oil reserves, and "even if we drilled every drop of oil out of every single one of the reserves that we possess — offshore and onshore — it still wouldn't be enough to meet our long-term needs. We consume about 25 percent of the world's oil. We only have 2 percent of the reserves. Even if we doubled U.S. oil production, we're still really short."

Some alternative-energy advocates, including wind-power developer T. Boone Pickens, the American Gas Association and the ethanol industry, praised the president's remarks.

But Obama drew anger from oil interests and skepticism from political backers of increased onshore drilling.

Erik Milito, a director for the American Petroleum Institute, said the administration's so-called incentives to speed development of offshore oil leases were less than they appeared. Shortening lease terms and increasing royalty rates through a graduated system could actually be disincentives, Milito said. "These are actions that will discourage investment here in the U.S. and shift that investment to other parts of the world, to places like Brazil," he said.

Sen. Orrin Hatch, R-Utah, said Obama's goal was "wishful thinking" unless the administration reversed course and allowed leases on federally controlled land in Utah and other Western states to go after oil shale.

The president's speech also drew criticism from some environmentalists.

Damon Moglen, the climate and energy director for Friends of the Earth, said the president's speech was "more about polluting the future than winning it." Moglen said that Obama had "doubled down on his support for dirty energy sources including the nuclear, corn ethanol, oil, natural gas and coal industries, while going AWOL on a crucial fight over the Clean Air Act."

(Renee Schoof contributed to this report.)


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