On March 19, Securing America’s Future Energy (SAFE) held an event discussing the Energy Security Trust Fund (ESTF). The ESTF would be designed to focus solely on investing in new technologies that would improve the United States energy security now and in the future. With our transportation sector accounting for 70% of our oil usage, SAFE believes R&D for new transportation technologies is vital for the future of the U.S.
The founder of SAFE, Robbie Diamond opened up by stating that establishing a trust is an important solution for the short, medium, and long term, urging that it must be implemented today. Diamond argued that innovation requires adequately funding research and development; something the United States has failed to do. Diamond said “we believe that the money should be used on technologies that reduce oil dependence.”
Heather Zichal, the Deputy Assistant to the President for Energy and Climate Change also spoke about how the Energy Security Trust can help remove the United States transportation sector from its heavy dependence on oil. Zichal also stated that the trust fund answers the three most important policy questions: how to spur economic growth, reduce oil dependency, and cut carbon emissions.
On the panel was McKie Campbell of BlueWater Strategies, Andy Karsner former Assistant Secretary of Energy, and Michael Levi Energy Fellow at the Council on Foreign Relations. Campbell stated that although America needs to develop alternative sources of fuel, it does not mean the U.S. needs to stop producing oil. However, according to Campbell, by reducing oil consumption, the U.S. can reduce the drain on the economy.
During the Q&A session, it was asked why the government must get involved and why can’t we just rely on the market to get things done? Karsner argued that the energy sector is massive, and the inability of markets to deal with climate change makes it a unique problem. While markets are indispensable, government is needed in order to set national strategy.
SAFE proposed the idea of an Energy Security Trust Fund back in December 2012, but it only gained national attention after President Obama expressed support for it in his State of the Union address in February.
The Energy Security Trust Fund would get its funding from fifty percent of all royalty revenue of the federal share from energy development in new regions. SAFE suggested that the United States expand domestic oil and gas production in order to generate more revenue for the fund. To seed the fund, SAFE proposed that about $500 million annually be allotted.
The Energy Trust Fund has some semblance of bipartisan support; with Senator Murkowski – who serves on the Senate Energy and Natural Resources Committee – and President Obama offering their own versions of the Trust. Murkowski believes funding should come from new drilling, whereas President Obama believes it should come from existing drilling. The two parties will need to iron out these outstanding differences, but in an era in which compromise is rare, the Energy Security Trust Fund offers a glimmer of hope for compromise.