Obama urges boost in energy production

Barack Obama, the US president, will on Wednesday call on oil companies to step up domestic energy production, as part of a plan to make the US less dependent on foreign sources of oil, according to senior White House officials.

In a speech that is to be delivered at Georgetown University, Mr Obama will also emphasise three other key measures necessary to reduce foreign oil imports by one-third over the next decade: the responsible development of natural gas, advancements in biofuels and cellulosic ethanol, and improved efficiency.

Officials said that the president was not backing away from his insistence that nuclear energy would also play an important role in the US’s energy future, although it did not appear to be a focus of his address. They also insisted that it was not “selling domestic oil and gas production as the number one solution”.

The speech represents the first attempt in many weeks by Mr Obama to reset the conversation in Washington, which has been dominated by war in Libya and unrest in the Middle East, and focus on domestic concerns.

It is also a pre-emptive strike against the inevitable wave of criticism that faces any administration at times of rising petrol prices.

Officials said the president would describe in detail new goals for the development of cellulosic refineries, proposals to encourage the use of natural gas in cars and trucks, and making vehicles more energy efficient.

Such progress comes with a price tag, however, and it is clear that the Republican majority in the House of Representatives are not interested in new spending to spur developments in alternative energy.

“All of these new technologies to break our dependence on oil will require significant research and development dollars,” one White House official said.

The White House has aggressively pushed back on accusations by oil industry lobbyists and Republicans on Capitol Hill, who claim that new safety regulations put in place in the wake of the Macondo oil spill in the Gulf of Mexico have brought the permitting process for new drilling projects to a virtual standstill.

The administration has repeatedly pointed to the fact that US oil production rose to its highest level in almost a decade last year.

But on Wednesday Mr Obama will take an even stronger posture against oil companies by highlighting a new report by the Department of Interior that says that more than two-thirds of offshore oil leases in the Gulf of Mexico and more than half of onshore leases on federal lands remain “idle”, neither producing nor being explored by the companies that hold the leases.

The DOI said on Tuesday that those resources “belong to the American people and they expect those supplies to be developed in a timely and responsible manner and with a fair return to taxpayers”.

Mr Obama is expected to unveil new “incentives” to encourage companies to use available leases.

Oil and manufacturing lobbyist in Washington were highly critical of the interior department’s report.

“Companies are investing billions of dollars in these leases to explore for resources, which the department has long understood to be part of the exploration process. By ignoring the reality that extensive geological surveys, inventory assessments and the explorations process itself can take years and cost billions, the department just misses the point,” the National Association of Manufacturers said.