Washington (Platts)--12Feb2013/1023 pm EST/323 GMT

US President Barack Obama on Tuesday pressed Congress to pass a cap-and-trade bill on greenhouse gas emissions, warning that he may use his executive powers to impose pollution controls if the legislature does not act.

He also said in his State of the Union address that he would speed up approval of new oil and gas drilling permits, and proposed that the US use some of its oil and gas revenue to fund alternative fuels research.

"I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago," he said, referring to two senators who have three times in the last decade proposed bills -- none of which passed -- that would have capped carbon emissions but allowed open-market trading of emissions allowances.

"But if Congress won't act soon to protect future generations, I will," Obama added. "I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed [up] the transition to more sustainable sources of energy."

The Environmental Protection Agency, which is currently finalizing its greenhouse gas rules for new and modified power plants, is required under the Clean Air Act to propose carbon emission standards for existing electricity generating facilities.

Such GHG rules would have major implications for coal-fired generation, which is a major emitter of heat-trapping carbon dioxide. Renewables, such as wind and solar, along with nuclear and natural gas-fired generation could stand to benefit.

On drilling, Obama said his administration "will keep cutting red tape and speeding up new oil and gas permits."

Some of the revenue from drilling on public land could fund an "energy security trust" that would support research into alternative fuels, he proposed.

"Let's ... free our families and businesses from the painful spikes in gas prices we've put up with for far too long," Obama said.

With the US last year opening its first manufacturing innovation institute in Youngstown, Ohio, Obama said he would launch three more advanced-technology manufacturing hubs, where businesses would partner with the departments of Defense and Energy to support high-tech jobs.

He also suggested a competition among states to fund energy efficiency projects.

"I'm also issuing a new goal for America: let's cut in half the energy wasted by our homes and businesses over the next 20 years," Obama said. "The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen."

--Herman Wang, herman_wang@platts.com
--Edited by Deepa Vijiyasingam, deepa_vijiyasingam@platts.com

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