America’s energy security gets a boost from the White House. President Obama proposed the creation of Energy Security Trust during his visit to the Argonne National Research Lab to talk about American energy security. The Energy Security Trust, a$2 Billion investment over 10 years, uses revenue generated by oil and gas development on federal lands to support new research and technology that will shift our cars and trucks off of oil for good.  Below is an infographic that outlines how this works:

Energy Security Trust Infographic via Whitehouse.gov

Here is an excerpt from the White House Blog:

So how does it work? The Energy Security Trust will invest in research that will make future technologies cheaper and better – it will fund the advances that will allow us to run cars and trucks on electricity or homegrown fuels, and on the technology that will enable us to drive from coast-to-coast without a drop of oil.

Over 10 years, the Energy Security Trust will provide $2 billion for critical, cutting-edge research focused on developing cost-effective transportation alternatives.The funding will be provided by revenues from federal oil and gas development, and will not add any additional costs to the federal budget. The investments will support research into a range of technologies – things like advanced vehicles that run on electricity, homegrown biofuels, and domestically produced natural gas. It will also help fund a small number of real-world experiments that try different transportation techniques in cities and towns around the country using advanced vehicles at scale.

If it is worth something, President Obama has indicated his desire to use the executive powers to curb climate change impacts should Congress fail to act.  According to Bloomberg, the president is also thinking of using a Nixon-era law, the National Environmental Policy Act (NEPA), signed into law by President Richard Nixon in 1970, to instruct all federal agencies to consider the impact of climate change when approving “major projects, from pipelines to highways.”  Of course, this can have some serious implications for large scale projects and some constituencies in the business sector are already freaking out over this mandate.

While we are busy discussing this issue, I’d like to share with you an address by President Obama from March 2011 in which he outlined his goals for reducing American energy dependence, heavily emphasizing new technology and alternative sources in addition to “safe and responsible” offshore drilling. A lot of what he outline in his blue print for change is already starting to take effect and I can only say that we are poised for a big change in the way we power our vehicles and industries.  Fossil fuels are definitely beginning to see a slow demise (but it will be decades before they are completely phased out in the transportation sector).

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(Source: Ars Technica)

Each year, the International Energy Agency produces a report in which it considers trends in energy use and makes projections for the future. Usually, these reports simply take recent trends and project them forward, but this year’s is somewhat different: its author uses a mixture of current trends and the projected impact of countries’ pledges for reducing greenhouse gas emissions and subsidies for fossil fuels. This results in some eye-popping figures. Globally, we’re subsidizing fossil fuel use to the tune of hundreds of billions of dollars, at a rate of over five times the subsidies going to renewable energy. And our inaction on climate goals has tacked $1 trillion onto the cost of reaching them—in 2009 alone.

We’ll start with the subsidies. In 2009, the total subsidies were $312 billion, which may seem high until you hear the 2008 figure: $558 billion, boosted by countries’ responses to the high fossil fuel prices that year. Most of the subsidies went to help cut the costs of using oil and natural gas products; another substantial chunk went to electricity use.

The IEA factsheet also forecasts a steep rises in the primary energy demand (increases by 36% between 2008 and 2035, or 1.2% per year on average) oil prices. The cost of getting on track to meet the climate goal for 2030 has risen by about $1 trillioncompared with the estimated cost in last year’s Outlook. This is because much stronger efforts,costing considerably more, will be needed after 2020. In the 450 Scenario in this year’s Outlook, theadditional spending on low‑carbon energy technologies (business investment and consumerspending) amounts to nearly $18 trillion (in year- 2009 dollars) more than in the Current PoliciesScenario, in which no new policies are assumed, in the period 2010‑2035. It is around $13.5 trillionmore than in the New Policies Scenario.

Click here to read the entire Ars Technica argument and the IEA’s World Energy Outlook website.

Note: Recommendations to remove the fuel subsidies will have huge implications for people living in developing and under-developed countries of the world.  The consequences has life-altering impacts for many people living below the poverty line, even in booming economies like China and India.  Many in these parts of the world earn so little that it won’t even make their ends meet and how would they pay for burning their kerosene stoves or ride their little 50cc mopeds to work.  Why do I find this huge divide between the educated class (i.e., Armani wearing executives sitting in board rooms of IEA and sipping lattes in Davos chatting over prices of fuel in some distant future) and the poor working class (the one who toil in hard work on the factory floors and make a meager living that pays for one meal a day)?  Governments in  these developing economic countries have a huge problem dealing with the pressures of providing the basic necessities and if the subsidies were lifted, many would find it hard to survive.  Unless the global community comes up with a quick, clean energy solution(s) that is affordable and accessible to all, I think many nations will not buy into these meaningless recommendations. Already many countries are struggling to find money to sustain their existing support programs for the poor and where would they go to find more money for wide-spread deployment of  Clean & sustainable energy solutions such as Solar, electric, etc.

Related articles

• IEA: last year’s inaction on climate goals cost us $1 trillion (arstechnica.com)
• World should eradicate fossil fuel subsidies-IEA (reuters.com)
• World should eradicate fossil fuel subsidies: IEA (reuters.com)
• China, Government Policy to Drive Energy Prices (247wallst.com)
• Call to stop fossil fuel subsidy (bbc.co.uk)
• Axe fossil fuel subsidies to stop climate change (newscientist.com)
• put an end to $312 billion subsidies to fossil fuels – IEA (politics.ie)
• Fat Subsidies for Fossil Fuels (solarfeeds.com)
• Oil demand to rise for 25 years despite green push (grist.org)
• Drumbeat: November 9, 2010 (theoildrum.com)
• More needs to be done to avoid oil spike, IEA says (sfgate.com)
• IEA World Energy Outlook 2010 Now Out; a Preliminary Look (theoildrum.com)
• “IEA raises oil price outlook on supply uncertainty” and related posts (kippreport.com)
• More needs to be done to avoid oil spike, IEA says (seattletimes.nwsource.com)
• Forecaster Sees Jump in Energy Demand by 2035 (nytimes.com)
• IEA sees oil peak looming (financialpost.com)
• China’s thirst to keep oil prices booming: IEA (theglobeandmail.com)
• Text:EIA November Outlk: Oil Prices To Rise to $87 By Q4′11 -1 (forexlive.com)
• G20 Leaders Not Removing Fossil Fuel Subsidies As Pledged. (thegoodhuman.com)
• Two-faced world spends billions on climate help, fossil fuel (go.theregister.com)