Obama presses energy reform in aftermath of oil spill

Wed May 26, 2010 3:03pm EDT

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By Jeff Mason

FREMONT, Calif., May 26 (Reuters) - President Barack Obama pressed for an overhaul of U.S. energy policy on Wednesday, seeking to harness outrage over the Gulf of Mexico oil spill to move the country away from its dependence on foreign fuels.

Obama, still fresh from a policy victory over healthcare reform and nearing one on financial regulation, appeared to be shifting his focus to another top policy goal: boosting domestic renewable energy and fighting climate change.

On a trip to California, which included a night of fundraising for a Democratic senator, Obama toured a Solyndra, Inc solar panel manufacturing plant and then spoke about how the oil disaster showed the need for a new energy approach.

"The spill in the Gulf, which is just heartbreaking, only underscores the necessity of seeking alternative fuel sources," Obama told a crowd of several hundred.

The Obama administration faces increasing pressure to show progress in the BP Plc (BP.L) oil spill that is wreaking environmental disaster in the Gulf and along the coast.

Obama said Americans understood the need for change and the devastation from the Gulf spill highlighted how perilous the process of extracting oil had become.

"Just think about it. Part of what is happening in the Gulf is that oil companies are drilling a mile under water before they hit ground, and a mile below that before they hit oil.

"With the increased risks, the increased costs, it gives you a sense of where we're going. We're not going to be able to sustain this kind of fossil fuel use. This planet can't sustain it," he said.

Though the president has tried to use the spill to galvanize support for his energy overhaul, a bill to do that is anguishing in the U.S. Senate.

Making things more difficult, a key plank of that policy -- expanding offshore drilling -- has been thrown into question by the spill. That expansion was seen as a key sweetener for winning Republican support for the bill.

Obama repeated on Wednesday that he hoped to have an energy and climate bill passed this year. Lawmakers and many analysts think that is unlikely.

He has come under growing political pressure to stop the spill itself. He defended his administration's handling of the disaster and said the government would not rest until the well was plugged and the cleanup completed.

"We will not rest until this well is shut, the environment is repaired and the cleanup is complete," he said. (Editing by Mohammad Zargham)

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