AAP with Reuters

US President Barack Obama has pledged new government incentives to boost clean energy, warning that the United States risks being left behind in the new industry by China and Germany.

But in a nod to political realities, Obama acknowledged in his annual State of the Union address that the deeply divided Congress would not approve comprehensive legislation to fight climate change.

Obama urged Congress instead to renew tax credits to support clean energy and repeated calls for an end to subsidies for oil companies, which he said were already profitable.

Obama, whose administration has been expanding the areas of potential use for solar, wind and other green technologies, set a goal of powering three million homes through renewable energy on public lands.

"The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation," Obama said, according to his prepared remarks.

"I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century. That's long enough," Obama said.

Legislation backed by Obama to fight climate change died in the US Senate in 2010 amid staunch opposition from the rival Republican Party, many of whose members question scientists' view that carbon emissions are behind rising temperatures.

Republicans have hammered Obama over a $US535 million ($A512 million) government loan for Solyndra, a now bankrupt solar firm, and his administration's rejection of the controversial Keystone XL pipeline project from Canada.

Obama also pledged support for the nation's shale gas boom, but reiterated that government must focus on safe development of the energy resource.

In his address, Obama called for government to develop a roadmap for responsible shale gas production and said his administration would move forward with "common-sense" new rules to make sure drillers protect the public.

"America will develop this resource without putting the health and safety of our citizens at risk," Obama said.

Obama's proposals on natural gas were similar to previous administration comments, and will likely do little to satisfy oil and gas industry backers, who argue that the federal government needs to stay out of the way of burgeoning shale development.

Some industry groups had hoped Obama might streamline government oversight or offer specific plans to increase access for oil and gas drilling.

SHALE GAS REVOLUTION

Improvements in drilling techniques have transformed the U.S. energy landscape in recent years by unlocking the nation's immense shale oil and gas reserves.

But the drilling boom has raised concerns about the safety of natural gas extraction techniques like hydraulic fracturing, or fracking, which environmentalists say is a danger to water supplies.

Communities in busy drilling areas of Pennsylvania blame fracking, which involves pumping millions of gallons of chemical-laced water and sand into shale formations deep underground, for polluting their drinking water.

Obama officials have argued public backlash against such drilling could limit expansion, so it's vital that government respond to these worries.

With fracking mostly exempt from federal oversight and most shale gas production occurring on private lands, the Obama administration is limited in its authority over the practice.

Agencies have started using the powers they do have to influence development where they can, with the Environmental Protection Agency proposing limits on shale gas emissions and developing standards for wastewater from drilling.

Obama said in his speech that the administration would move forward with rules that would require companies to disclose chemicals used during the fracking process on public lands.

The Interior Department has been working on updating these regulations and has signaled that new rules would be released some time this year.

PROMOTING CLEAN ENERGY

As part of its "all-in" approach to U.S. energy policy, Obama also doubled-down on his administration's commitment to renewable energy, calling for clean energy tax credits and energy efficiency incentives for manufacturers.

Transforming the U.S. economy by investing in clean energy innovation has been a central theme for the administration since Obama took office in 2009.

Though Congress failed to move on a proposal he put forward last year to set a target for power plants to produce mostly clean electricity by 2035, Obama said the administration would establish zones to develop 10 gigawatts of solar and wind power projects on public lands.

In addition, the Defense Department will purchase one gigawatt of renewable energy, with the Navy purchasing enough capacity to power a quarter of a million homes a year. (Additional reporting by Edward McAllister; Editing by David Storey)