Speaking at Argonne National Laboratory near Chicago, the president said the proposal would set aside $2 billion over 10 years and support research into a range of cost-effective technologies such as advanced vehicles that run on electricity, homegrown biofuels, fuel cells, and domestically produced natural gas.
Noting that the United States was making progress in weaning itself off foreign oil, Obama said, "[But] the only way to really break this cycle of spiking gas prices, the only way to break that cycle for good is to shift our cars entirely -- our cars and trucks -- off oil."
That's why, he said, he called on Congress during his State of the Union address to set up an Energy Security Trust to "fund research into new technologies that will help us reach that goal."
A fact sheet released by the White House said the mandatory funds would be set aside from royalty revenues generated by oil and gas development in federal waters of the Outer Continental Shelf.
Until the trust become reality, Obama said, "we'll keep moving on the 'all-of-the-above' energy strategy that we've been working on for the last couple years, where we're producing more oil and gas here at home but we're also producing more biofuels, we're also producing more fuel-efficient vehicles; more solar power; more wind power. We're working to make sure that here in America we're building cars and homes and businesses that waste less energy."
The idea has some bipartisan and business support, but likely will encounter resistance from congressional Republicans, who will call it a tax on energy producers, The New York Times reported said.
The White House said the proposal isn't a new tax and doesn't cost the public anything.
Barry Russell, Independent Petroleum Association of America president and chief executive officer, applauded "the central role that natural gas development" plays in Obama's energy plan.
"We have more than 100 years supply of this clean-burning, job-creating, consumer-helping fuel," Russell said in a statement.
"IPAA encourages the administration to empower states to continue their successful regulation, and to allow producers to deliver the energy security that comes from increasing the responsible production of oil and natural gas," he said. "Our industry is hopeful that the expedited permitting efforts outlined in the President's plan will enable independent producers to continue growing our nation's oil and natural gas supplies.