Image: John McCain
LM Otero  /  AP
Presidential candidate Sen. John McCain, R-Ariz., wants to "encourage heroic efforts in engineering," and "reward the greatest success" in breaking the back of America's oil dependency.
updated 6/23/2008 2:33:20 PM ET 2008-06-23T18:33:20

John McCain is hoping to solve the country's energy crisis with cold hard cash.

The presumed Republican nominee on Monday proposed a $300 million government prize to whoever can develop an automobile battery that far surpasses existing technology. The bounty would equate to $1 for every man, woman and child in the country, "a small price to pay for helping to break the back of our oil dependency," McCain said at Fresno State University.

McCain said such a device should deliver power at 30 percent of current costs and have "the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars."

The Arizona senator also proposed stiffer fines for automakers who skirt existing fuel-efficiency standards, as well as incentives to increase use of domestic and foreign alcohol-based fuels such as ethanol.

In addition, a so-called Clean Car Challenge would encourage U.S. automakers to develop zero-emission vehicles by offering consumers the incentive of a $5,000 tax credit when they purchase one.

"In the quest for alternatives to oil, our government has thrown around enough money subsidizing special interests and excusing failure," said McCain. "From now on, we will encourage heroic efforts in engineering, and we will reward the greatest success."

The proposal comes as gasoline has reached a record cost of more than $4 a gallon. That has boosted the price of virtually all goods and services, sent commuters flocking to public transportation and increased tensions between the United States and its Middle Eastern oil suppliers.

Video: Energy arguments Last week McCain suggested one way to ease supply concerns would be to lift a federal ban on offshore oil drilling if individual states want to allow it even though he favored the decades-old moratorium on drilling in the 2000 campaign. His Democratic rival, Sen. Barack Obama of Illinois, opposes that idea, saying it would do nothing to address immediate price concerns.

On Sunday, Obama told a Washington audience he would strengthen government oversight of energy traders whose futures speculation he blames in large part for the skyrocketing price of oil.

McCain told a town-hall questioner on Monday that he was unsure of the extent of any oil speculation, but if it has boosted the price of a barrel by 50 percent — as he has heard from some analysts — or just 1 percent, "then it seems to me there should be a thorough and complete investigation."

He added: "If there is anybody who took advantage of Americans in order to enrich themselves, then it's unacceptable."

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In his remarks, McCain expressed exasperation both with the federal government and the private sector.

He said rising costs during a time of stagnant wages evokes the 1970s era of "stagflation."

Without blaming his fellow Republicans in the Bush administration or Democrats who control Congress by name, McCain said: "It feels the same today, because the unwise policies of our government have left America's energy future in the control of others."

The pork-barrel opponent also blasted "a hodgepodge of incentives" for the purchase of fuel-efficient cars.

"Different hybrids and natural-gas cars carry different incentives, ranging from a few hundreds dollars to four grand. They're the handiwork of lobbyists, with all the inconsistency and irrationality that involves," McCain said.

Following the speech, McCain was scheduled to attend fundraisers in Fresno and Santa Barbara, part of a money push that helped the senator raise a personal record of $21 million last month.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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