President Obama Addresses Rising Gas Prices, Announces New Funding for Algal BioFuel and Natural Gas Transportation

As the U.S. federal election begins to heat up and the Republican's close in on choosing a presidential candidate, President Obama and his Administration find themselves under the financial microscope again.

The current pressure comes with the recent and steady price increase Americans are paying to fill their vehicles with fuel. Due in part to Iran's threats to withhold its oil supplies from the European Union -- a result of sanctions the EU has imposed related to the Iranian nuclear program -- gas prices are being affected in the U.S. The gas story, however, is larger than the current situation in Iran:  the cost of gasoline has increased nearly 12% in the past year.

Republicans, in particular presidential hopefuls, are demanding that more oil be drilled at home and claim the current Administration has dropped the ball on domestic oil production. Most recently President Obama declined to approve the proposed Keystone Pipeline that would connect oil sands in Canada to refineries in the Gulf of Mexico.

On Thursday, while addressing students at the University of Miami, the President not only disagreed with his Republican counterparts on his efforts to boost domestic oil production but also warned that drilling for more oil is not the answer to solving the energy problem.

The President pointed to the fact that "America is producing more oil today than at any time in the last eight years.  That’s why we have a record number of oil rigs operating right now -- more working oil and gas rigs than the rest of the world combined."

But he was quick to point out that drilling isn't the solution:  "You know we can’t just drill our way to lower gas prices.  If we’re going to take control of our energy future and can start avoiding these annual gas price spikes that happen every year we’ve got to have a sustained, all-of-the-above strategy that develops every available source of American energy.  Yes, oil and gas, but also wind and solar and nuclear and biofuels, and more."

An "all-of-the-above" strategy will leave nothing off the table when it comes to creating new and more efficient sources of energy, which includes developing natural gas and biofuel technology as a fuel source for vehicles.

Although he stated clearly "there are no silver bullets short term when it comes to gas prices -- and anybody who says otherwise isn't telling the truth," President Obama briefly mentioned that his administration was "launching a program that will bring together the nation’s best scientists and engineers and entrepreneurs to figure out how more cars can be powered by natural gas, a fuel that’s cleaner and cheaper and more abundant than oil." 

Launching such a program seems highly intuitive to the President:  why not leverage an energy source that is found in copious amounts within the United States.  "We’ve got more of that.  We don’t have to import it.  We may be exporting it soon."

Shortly after the president's speech the Department of Energy (DOE) released details of the program. Through its Advanced Research Projects Agency – Energy (ARPA-E), which Obama created in 2009, the DOE will make $30 million available to support the development of natural gas for vehicles and $14 million to support the development of algal biofuels (which the president claimed "could replace up to 17 percent of the oil we import for transportation with this fuel").

Though the president concluded his speech by saying that energy will be one of the major challenges for future generations, he encouraged the students in attendance to keep things in perspective.

"The easiest thing in the world is to make phony election-year promises about lower gas prices. What’s harder is to make a serious, sustained commitment to tackle a problem. I need you guys to work hard.  I need you guys to dream big.  I need those of you who are a lot smarter than me to figure out how we’re going to be able to tap into new energy sources," he said.

Image Credit: Whitehouse.gov