1 of 4. U.S. President Barack Obama delivers remarks on energy at the Argonne National Lab near Chicago, March 15, 2013.

LEMONT, Ill./WASHINGTON | Fri Mar 15, 2013 6:39pm EDT

LEMONT, Ill./WASHINGTON (Reuters) - President Barack Obama tried to move past partisan fights over energy policy on Friday with a modest proposal to fund research into cars that run on anything but gasoline.

Obama toured the Argonne National Laboratory outside of Chicago, known for its research into advanced batteries used in electric cars, then delivered a speech highlighting the need to find more ways to wean vehicles off oil.

The United States has a newfound wealth of oil and natural gas resources made possible by hydraulic fracturing and other drilling advancements, but consumers still face high prices at the pumps because gasoline prices are tied to world markets.

"The only way to break this cycle of spiking gas prices for good is to shift our car and trucks entirely off oil," Obama said in Argonne's advanced photon facility, which says it produces the brightest source of X-rays in the Western Hemisphere, used for an array of research projects.

The Democratic president proposed a fund that will draw $2 billion over 10 years from royalties the government receives from offshore drilling in the Outer Continental Shelf.

The research would be aimed at new ways to lower the cost of vehicles that run on electricity, biofuels, natural gas or other non-oil fuel sources.

Obama first mentioned the Energy Security Trust fund in his State of the Union address last month.

The White House touted the idea as bipartisan, saying it came from retired military and business leaders, including some Republicans, who belong to a policy group called Securing America's Future Energy.

"This is not a Democratic idea or a Republican idea," Obama said, standing in front of three cars designed to run on alternative fuels. "This is just a smart idea."

But Republican approval was far from assured.

"For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically," said Brendan Buck, a spokesman for Republican House of Representatives Speaker John Boehner. "Unfortunately, this administration has consistently slowed, delayed, and blocked American energy production."

By choosing to focus his first energy speech on research - an issue that appeals equally to Republicans and Democrats, industry and environmental groups - Obama is seeking to build common ground on energy, which has been a divisive policy issue.

"In order for something like this to pass the Hill, it will need votes from both sides," said Michael Levi, an energy fellow at the Council on Foreign Relations. "That makes it wise for the president to start with something that Congress can work from."

IS CONGRESS WILLING?

The research trust fund will require consent from Congress, which is grappling with federal budget cuts. Senator Lisa Murkowski of Alaska, the top Republican on the Senate Energy Committee, had proposed a similar idea. But her version called for expanded drilling, which Obama's proposal does not include.

Murkowski's spokesman Robert Dillon said the president's plan relied on royalties that have already been factored into the budget, "which could mean either deficit spending or less funding for the Land and Water Conservation Fund."

"There's a better way that not only funds investment in research, but also addresses our need for affordable and abundant energy," Dillon said, referring to expanded drilling.

White House officials said the president's plan would not add to the deficit because they expect leasing revenues to grow in coming years for several reasons, including changes the administration plans to make to leasing policy.

White House spokesman Josh Earnest said the administration is willing to work with Congress on the research fund plan.

"If there are different ideas people want to offer up, we'll certainly have a conversation with them about that," he said.

Mark Kennedy, the director of George Washington University's Graduate School of Political Management, said despite the misgivings expressed by some Republicans, the White House may be able to negotiate a deal that pleases both sides.

"I think this is the opening bid," Kennedy said. "This is the beginning of the conversation."

In his first term, Obama pushed for laws that would use market forces to reduce climate-changing carbon pollution, but the "cap and trade" bill was opposed by industry and failed in Congress.

His administration pumped $90 billion in economic stimulus funds into clean energy and "green jobs" projects, helping to dramatically expand renewable energy production in America.

But some projects failed, including a California solar panel maker called Solyndra that had received a $527 million government loan. Critics excoriated his administration for that failure, as well as for delaying approval of the Keystone XL crude oil pipeline from Canada.

The energy trust fund "is a more pragmatic approach to try to continue investments in green energy given the degree to which the (clean energy) brand has been damaged," said Kennedy, a former Republican congressman from Minnesota.

(Editing by Doina Chiacu and Mohammad Zargham)

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1 of 8. Scientists work in a laboratory at the Complutense Medicine University in Madrid December 4, 2012.

MADRID | Wed Jan 16, 2013 10:45am EST

MADRID (Reuters) - Amanda Bolanos, a young Spanish scientist, knows she will not be coming home.

"Exiled in Cambodia" read the banner the molecular biologist carried at a protest in Madrid against government cutbacks. Back on leave from Phnom Penh, the 30-year-old researcher plans to head for Latin America if her present contract in Cambodia is not renewed. She sees little chance of finding work in Spain.

Bolanos and other scientists say sharp cuts in Spanish state spending on research and development, part of efforts to lower the national debt, leave them little choice but to go abroad. And they worry the cuts put Spain's competitive future at risk.

"There are two problems," said another demonstrator, Amaya Moro-Martin, 38, an astrophysicist with a prestigious Ramon y Cajal fellowship. "One is that there isn't enough investment. The other is that the investment there is isn't efficient."

She returned to Spain after 11 years in the United States but Moro-Martin, who carried her infant daughter on the march, said there was no chance her contract in Spain would be renewed at the end of this year and she will probably go abroad again.

Spain's modest place in the world of scientific research is far from new. Moro-Martin's fellowship is named after one of just two Spaniards ever to win a Nobel science prize.

And while state spending on R&D, even since the financial crisis hit, is comparable to that of wealthier EU governments such as Germany, private research by Spanish firms trails their northern rivals: current total national R&D spending is only about 1.4 percent of Spain's GDP, half the level in Germany.

But what particularly worries Spanish scientists who fret for their jobs, and economists who see research spending as an engine of growth, is that far from redoubling efforts to catch up, Spain now risks falling even further behind its competitors.

The government chopped fully 25 percent off its research and development budget last year and will trim a further 7 percent in 2013, leaving it at under 6 billion euros ($8 billion). The German government, by contrast, is increasing spending on R&D by over 6 percent this year to close to 14 billion euros.

With an economy just over 40 percent the size of Germany's, Madrid is still spending a comparable amount to Berlin, but the government's critics fear it is not doing enough to make up for a historic lag in investment, especially by private firms.

An official at the Economy Ministry, which swallowed up the science ministry after conservative Prime Minister Mariano Rajoy took power a year ago, insisted the government was doing what it could: "In the current circumstances we are keeping the system going and preparing for the future, to guarantee that every euro spent is well invested," the official said. "We have to create the best conditions possible so our scientists come back."

Spain is not alone. As France, Britain, Germany and others in the north fund more research to fend off competition from Asia, Italy has also scaled back its government R&D budget, prompting Roberto Natalini, a mathematician at Italy's National Research Council (CNR) to warn: "We will pay for this in the medium term, not immediately. We will lose our competitiveness."

TWO-SPEED EUROPE

Without more private R&D spending, Spain, Italy and others in the south may continue to lag. But critics of government cuts say these risk creating a vicious circle, discouraging business:

"Public money attracts private sector money," said biologist Antonio Baraber from Spain's National Oncology Centre. "You can't just hope people will invest if there's no base."

In 2010, OECD figures show, only 242 international patents were filed from Spain, compared to over 5,600 from Germany. Where the private sector accounts for over two thirds of total German R&D spending, in Spain it provides less than half.

All the more reason, Spain's researchers say, for their government not to be cutting while competitors invest more:

"There's a crisis everywhere but other countries aren't cutting off the lifeline," said Ester Artells, a 36-year-old Spanish biologist based at Marseille University in France.

The German government has raised its R&D budget by 6.3 percent this year and France is finding 1.2 percent more. After cutting back, Britain too is adding investment in science.

Venture capitalist Francisco Marin, whose Ambar fund invests in Spanish technology firms, said Madrid's failure to catch up in generating ideas to drive new businesses was a big risk for a country where one worker in four is already out of a job:

"Employment and wealth come from the creation of new companies," he said. "Existing companies don't create employment, they keep it at the same level."

Carlos Andradas, the mathematician who is president of the Spanish Confederation of Scientific Societies (COSCE), says it will take years, if not decades, to bridge the widening gap Spain has allowed to open up with its northern competitors.

"When you fall behind in a race, catching up is very hard," Andradas said. "It will take a long time for Spain to catch up, starting from a position of insufficient development."

Protesting astrophysicist Moyo-Martin believed her country had begun to improve its international performance in research in recent years, half a century after New York-based Severo Ochoa became the last Spaniard to win a Nobel science prize.

Now, however, it was back in a "very precarious position", she said: "The problem is, what's happening now isn't reform - it's just cuts."

(Additional reporting by Naomi O'Leary in Rome and Gareth Jones and Michelle Martin in Berlin; Editing by Chris Wickham, Fiona Ortiz and Alastair Macdonald)

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