President Barack Obama proposed establishing of a $2 billion Energy Security Trust as vehicle for funding research in alternative renewable technologies that will “break this cycle of spiking gas prices for good” and “shift our cars and trucks off of oil for good.”

A companion report from the U.S. Department of Energy projects that biofuels could supply as much as half of the jet fuel market and 30 percent of the gasoline and diesel markets by 2050 if technology standards are met.

The president had mentioned such a trust in his State of the Union address in February and reiterated it most recently in a speech at the Argonne National Laboratory March 15. The plan is to raise revenue from oil and gas production on public lands and put it towards research into new forms of clean energy for transportation.

Obama said by putting the revenue toward research that will benefit the public, “we can support American ingenuity without adding a dime to our deficit,” and suggested that the funds could be used to support scientists designing more energy efficient engines, cheaper and more efficient batteries, new sources of clean transportation fuels,

“We can support scientists who are designing new engines that are more energy efficient; developing cheaper batteries that go farther on a single charge; and devising new ways to fuel our cars and trucks with new sources of clean energy—like advanced biofuels and natural gas—so drivers can one day go coast-to-coast without using a drop of oil.”

The plan is to set aside $200 million annually for ten years from royalty revenues generated by oil and gas development in federal waters of the Outer Continental Shelf to support research into a range of cost-effective technologies such as advanced vehicles that run on electricity, biofuels, fuel cells, and natural gas.

Obama says the idea for the trust was put forward by a non-partisan coalition of CEOs and retired generals and admirals. In order to gain bipartisan support in Congress, he is pushing an “all-of-the-above” energy strategy that promotes responsible oil and natural gas development, investment in energy efficiency, expansion of electric and hydrogen fuel cell technologies, and the use of advanced biofuels. The plan also calls for partnering with the private sector to adopt natural gas and alternative fuels for the country’s trucking fleet, and calls for an overall goal to double energy productivity by 2030.

Transportation accounts for 71 percent of U.S. petroleum consumption and 33 percent of the country’s greenhouse gas emissions, according to the Department of Energy’s Energy Efficiency and Renewable Energy (EERE) Transportation Energy Futures Project (TEF). TEF is a collaborative effort among several government agencies including EERE, the National Renewable Energy Laboratory, and the Argonne National Laboratory. Its steering committee includes experts from the Environmental Protection Agency, the U.S. Department of Transportation, industry associations and academic researchers.

The TEF study finds that the country can reduce fossil oil use and greenhouse gas emissions by 80 percent by 2050 and proposes pathways for achieving that goal. One of the key findings of the study: “Biofuels are likely to be able to compete successfully with petroleum-based fuels, particularly in the jet fuel and gasoline markets, if R&D is successful and petroleum project prices are as high as the Energy Information Administration projects.”

The study also finds that the use of biofuels is constrained by the size of the potential biomass resource and use demand from other sectors such as power and renewable chemicals. But as alternative sources of power are developed, biomass resources can be diverted to the production of biofuels.

It remains to be seen whether or not Congress will go for this proposal. Obama is hoping that because it is not a tax bill and it has an all-inclusive energy goal, it will pass muster with enough House Republicans to have a fighting chance. Opposition from both the right and the left is already making its way into the press. But Obama is optimistic.