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Obama returns fire at Republicans over gas prices

By Missy Ryan

MOUNT HOLLY, North Carolina (Reuters) - President Barack Obama, under Republican attack for high gas prices that could harm his re-election bid, urged Americans on Wednesday to have faith in alternative fuels and accused rivals of not telling the truth about the rising cost of energy.

For the second time in less than a week, Obama railed against "phony" quick fixes to the nation's energy challenge as he visited the election battleground state of North Carolina.

It was another chance for Obama to draw a sharp distinction with his Republican challengers, who he says can talk of easy solutions on the campaign trail that he cannot consider as president. On Tuesday, citing his duty as commander in chief, he took a similar tack when he chided Republicans for "beating the drums of war" over Iran's nuclear program.

"We are not going to be able to just drill our way out of the problem of high gas prices," Obama told workers at a Daimler Trucks North America factory that makes vehicles that run on natural gas.

"Anyone who tells you otherwise either doesn't know what they are talking about or they are not telling you the truth."

His visit to North Carolina, where Obama needs to win over blue-collar voters, reflects a White House effort to link energy innovation to job creation by highlighting steps to improve fuel efficiency and cut U.S. dependence on foreign oil.

"We may not get there in one (presidential) term," Obama said. "It is going to take us a while to wean ourselves off of the old and grab the new. But we're going to meet this challenge."

Obama's trip on Wednesday comes on the heels of the most important night in the Republican primaries thus far. Republican candidate Mitt Romney failed to land a knockout blow on rival Rick Santorum in this week's "Super Tuesday" nominating contests, threatening a drawn-out battle to choose a nominee to face against Obama this fall.

WORRY ON THE TRAIL

Romney, Santorum and Newt Gingrich, in addition to Republican lawmakers, have all hit Obama for what they say are his failed energy policies. With gas possibly heading to $5 a gallon this summer, candidates have targeted voters worried about the impact of gas on their pocketbooks just as the economy shows signs of picking up steam.

Economic uncertainty weighs heavily in states like North Carolina, which has one of the country's highest unemployment rates at more than 10 percent, according to the Labor Department, compared to 8.3 percent nationally.

Both first lady Michelle Obama and Vice President Joe Biden have made visits to North Carolina, where voters will take part in the state's Republican primary on May 8.

In the face of increasingly strident Republican attacks, Obama has heralded an increase in domestic oil production and stressed that rising gasoline prices at home are due largely to booming demand abroad and to volatility on world markets.

Obama's long-term fixes include raising fuel economy standards and providing incentives for Americans to make and buy products that run on alternative energy.

The president's proposals, which he discussed after touring the factory near Charlotte, would set aside $1 billion for a national "challenge" to encourage the use by communities of advanced vehicles.

He also wants to expand tax incentives for electric cars and alternative-fuel trucks to $10,000 from the current $7,500 and fund research into vehicle and battery technology. Much of the proposed policy was previewed in the president's 2013 budget and would require approval from a Congress mired in gridlock.

(Additional reporting by Alister Bull and Patricia Zengerle; Editing by Mary Milliken and Anthony Boadle)

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