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Investing in tomorrow's energy today

“Instead of subsidizing yesterday's energy, let's invest in tomorrow's.” That’s what President Barack Obama said last night in his State of the Union speech.
By Ron Kotrba | January 26, 2011

“Instead of subsidizing yesterday's energy, let's invest in tomorrow's.” That’s what President Barack Obama said last night in his State of the Union speech. While the political analysts discuss Obama’s following in former President Bill Clinton’s path by moving to the center after the Republicans swept up in the first mid-term election since election to the presidency—essentially a referendum to do things differently—I’m most interested in his campaign to eliminate the mega-subsidies our government gives to petroleum companies.

“We're not just handing out money,” he said. “We're issuing a challenge. We're telling America's scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we'll fund the Apollo projects of our time. At the California Institute of Technology, they're developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they're using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015. We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if—I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.”

The stars sure aligned for that speech as the USDA and U.S. DOE were making statements and releasing announcements in a flurry of activity late last week, regarding hundreds of millions of dollars in funding and loan guarantees for biofuels plants.

But do you think elimination of petroleum subsidies can happen without an all-out political war? The oil lobby is powerful and persuasive, and will fight hard for the status quo. Where will they start cutting, and when do you think it could begin?