Obama talks tough on energy

President Obama chastised America for its lacklustre approach to energy development in his first address to the joint session of Congress last night, an opportunity he also used to call on Congressional leaders to accelerate efforts to pass cap-and-trade legislation.

While laying the foundations for further economic investment in the energy sector, the president reminded the country of failures in renewable energy development during more prosperous times.

"We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before," he said, adding that the US risked losing out to more ambitious rivals.

"It is China that has launched the largest effort in history to make their economy energy efficient," he said. "We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."

He added that the recently passed American Recovery and Reinvestment Act would help to reverse this trend, noting that "we will invest $15bn a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America."

He also reiterated the positive impact the stimulus plan would have on the economy and unemployment.

"Over the next two years, this plan will save or create 3.5 million jobs," he predicted. "More than 90 per cent of these jobs will be in the private sector – jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit."

The legislation had been passed without earmarks, he said, while also pledging to root out inefficiencies in government spending to support a goal, announced on Monday, of halving the nation's deficit by the end of his first term in office. His team has already identified $2 trillion in savings in the federal government over the next decade.

However, Obama said that the transition to a low carbon energy infrastructure would require further legislative action and told both sides of the House that a cap-and-trade bill would enable renewable energy to flourish.

The Obama administration had been expected to push to have cap-and-trade legislation in place before the end of the year, but earlier this week White House officials hinted the proposed bill could be delayed as a result of Republican opposition.

Obama's speech came the same day as Federal Reserve chairman Ben Bernanke announced a three-step plan to prop up ailing banks, following a three-day losing run on the markets. The plan would likely cost more than the $700bn already allocated to banks, Obama said, but added that there would be no chance for bankers to take extra bonuses this time.

The president will also be submitting a budget with a 10-year timeline, that will include for the first time the full costs of the country's two current wars, he promised.