President Obama will call on Congress to work with states and local governments to create "sustainable shale gas growth zones" that help regions come together to ensure unconventional natural gas is developed safely and responsibly.
Some details of the plan, as well as other initiatives the administration plans to pursue this year, were unveiled following the State of the Union address to the nation Tuesday night (see Shale Daily, Jan. 29).
The president indicated he wants shale gas developed in a way "that helps build diverse and resilient regional economies that can withstand boom-and-bust cycles and can be leaders in building and deploying clean energy technologies." He pointed to "smart regional planning and federal technical assistance" to states and communities to ensure that "we develop shale gas the right way -- and at the same time create stable communities with well-paying jobs."
Also on the to-do list is boosting the use of natural gas in transportation and industry. During the address, the president recommended a stronger focus on leveraging natural gas in manufacturing, transportation and power generation to create jobs, reduce costs and reduce dependence on foreign oil supplies.
"The administration will help states and localities coordinate review of proposed private sector projects to invest in new energy-intensive U.S. manufacturing plants relying on natural gas," the plan said. "The administration will also expand tax incentives to build fuel infrastructure and to replace oil with U.S.-produced natural gas in trucks and other transportation."
The United States will continue to rely on "responsibly produced oil and gas," but the president is committed to a "long-term policy that allows us to transition to cleaner energy sources." To that end, he wants to establish an energy security trust fund to advance research and development for advanced vehicle technologies.
Congress would be urged to repeal the $4 billion in subsidies provided to the oil and gas industry every year, which also would help fund a $2 billion energy security trust and enable reforms "to promote diligent oil and gas development on federal lands."
The energy security trust, said the paper, "has broad bipartisan support, including retired admirals, generals and leading CEOs, and focuses on shifting our cars and trucks off oil. This $2 billion investment in a range of cost-effective technologies -- like advanced vehicles that run on electricity, homegrown biofuels, hydrogen and domestically produced natural gas -- will be drawn from revenues generated from federal oil and gas development.
"Establishing a dedicated source of funding will allow the Energy Department to maintain targeted and sustained investments that are catalytic and directly advance U.S. energy security."
Tucked into the paper was a proposal to permit renewable energy projects on public lands "while setting aside places too precious to develop." The president had mentioned setting aside some federal land in his address.
"The president believes that we must encourage energy development in the right ways and in the right places, but he also recognizes that there are some places that are too special to develop," the paper said. He plans to "use his authority to protect some of the places that Americans love most, even as we continue to develop energy resources elsewhere."
To support investments in advanced vehicles and infrastructure, the president plans to introduce a tax credit and an extension of tax credits that would support cellulosic biofuel research. The new tax credit is envisioned as catalyzing investments "in the necessary infrastructure to support deployment of advanced vehicles at critical mass.
"This proposal would be fuel neutral, allowing the private sector to determine if biofuels, electrification, natural gas, hydrogen or other alternative fuels would be the best fit in different communities."
In addition, the president proposed to extend the cellulosic biofuel producer credit that expired on Dec. 31, 2013. Cellulosic biofuels have the potential to reduce petroleum consumption and carbon pollution while boosting rural economic development. Extending the existing tax credit would accelerate development of this transformative transportation fuel.
Four new manufacturing innovation institutes are planned for this year, doubling the number already announced, which would, among other things, work on energy development.