Drilling Revenues: A Funding Stream for Energy Innovation?

Matt Hourihan July 29, 2011
July 29, 2011

One of the major challenges in structuring a large-scale push for energy innovation is figuring out how to fund it. The International Energy Agency and multiple domestic organizations inside and outside government have identified shortfalls in energy research, development and demonstration as a key barrier to developing viable clean technology. Yet the House budget debate has made painfully clear that there’s little interest in addressing this shortfall. We thus need to be looking for alternative, dedicated revenue streams wherever we can find them – which brings us to drilling revenues. The federal government typically brings in anywhere from $5 billion to $7 billion in a given year in revenues from offshore oil and gas. Most are deposited directly into the U.S. treasury for no specified purpose. It’s high time Congress specified a purpose – by creating a new, dedicated trust for energy innovation to boost investment, especially if coupled with a royalty rate increase.