Obama pushes energy plan in campaign-style tour

LAS VEGAS Fri Jan 27, 2012 3:01am IST

U.S. President Barack Obama speaks at a UPS facility in Las Vegas, Nevada, January 26, 2012. Obama used the event to talk about American energy and liquefied natural gas. REUTERS/Jason Reed

U.S. President Barack Obama speaks at a UPS facility in Las Vegas, Nevada, January 26, 2012. Obama used the event to talk about American energy and liquefied natural gas.

Credit: Reuters/Jason Reed

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LAS VEGAS (Reuters) - President Barack Obama pitched a plan on Thursday to boost U.S. use of natural gas and open more land for offshore drilling during a campaign-style tour aimed at bolstering confidence in his economic stewardship.

At a stop in Las Vegas, Nevada, the Democratic president sought to counter Republican criticisms of his energy policies as he proposed tax incentives for companies to buy natural gas trucks, which would help build demand for abundant domestic supplies of the fuel.

Republicans have hammered Obama on his handling of the energy issue, and were angered by his decision to block the Keystone XL Canada-to-Texas oil pipeline, which they say would have created jobs and reduced U.S. dependence on oil from the Middle East.

Obama said the United States needs an "all-out, all-in, all-of-the-above strategy" to develop energy resources at home and that doing so would create American jobs. Critics complain that Obama, gearing up for the November 6 election in which he is seeking a second term, favors a green agenda over traditional oil and gas energy development.

"A great place to start is with natural gas," Obama said during a visit to a UPS (UPS.N) facility in Las Vegas, which received stimulus funding to invest in liquefied natural gas vehicles and build a public LNG refueling station.

"We've got a supply of natural gas under our feet that can last America nearly a hundred years," he said. "Developing it could power our cars, our homes, and our factories in a cleaner and cheaper way. The experts believe it could support more than 600,000 jobs by the end of the decade."

Obama, seeing some improvement in his poll numbers, is touring five states - Iowa, Arizona, Nevada, Colorado and Michigan. The trip follows his State of the Union address on Tuesday in which he took a combative tone toward congressional Republicans and spoke of the need to reduce income inequality.

Obama's overall approval ratings had sagged amid voter concern over the lackluster economy, but his popularity has inched higher and in some recent surveys has climbed above the important 50 percent threshold.

In Tuesday's address to a joint session of Congress, Obama spoke of the nation's booming natural gas sector, which has grown dramatically in recent years as advances in technology have unlocked vast new reserves.

Later on Thursday, Obama will visit Buckley Air Force Base in Aurora, Colorado, where the Air Force is installing a one-megawatt solar panel system, and where last year it test-piloted jets that run on advanced biofuels.

A CLEAN ALTERNATIVE?

Increasing domestic natural gas consumption would benefit drillers, as U.S. natural gas prices have fallen sharply because of the growing glut and the relatively warm winter.

Using domestic natural gas as a cleaner alternative to importing foreign oil has been heavily promoted by Texas oil billionaire T. Boone Pickens and has attracted support from both sides of the aisle in Congress.

Still, Obama's natural gas truck proposal, which would need congressional approval, could face an uphill battle to make it into law. Republicans, campaigning on promises to cut government spending, would likely resist costly energy subsidies.

Similar measures aimed at expanding tax breaks for natural gas vehicles have failed to break through partisan gridlock, and conservative groups have opposed such legislation on the grounds that government should not be in the business of picking winners and losers in the energy sector.

Obama also announced that the Interior Department will hold the last scheduled offshore lease sale of the government's current five-year drilling plan in June, offering 38 million acres (15 million hectares) for development in the central Gulf of Mexico.

In December, the department held its first offshore lease sale since the massive BP oil spill in April 2010. Companies successfully bid more than $337 million for rights to drill in the Gulf.

Analysts said those results were a sign that drilling is rebounding in the Gulf after the administration temporarily shut down deepwater exploration after the BP disaster.

Still, oil and gas industry backers have complained that the administration has hindered drilling through slow permitting and a raft of new rules implemented since the 2010 oil spill.

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