Bush outlines energy plan

Published May 17, 2001 2:02AM (EDT)

President Bush, in his much-awaited energy plan, will warn on Thursday that the United States faces "the most serious energy shortage since the oil embargo of the 1970s." He will order federal agencies to dismantle regulatory barriers that slow gas, electrical, coal and nuclear power production and propose opening federal lands for oil drilling.

He also will encourage conservation, setting aside most of the $5 billion in new tax incentives for people who buy energy-efficient cars or use alternative energies. The 163-page policy, developed by a task force headed by Vice President Dick Cheney, also orders review of fuel economy standards with an eye toward possibly requiring them to be more fuel efficient.

"A fundamental imbalance between supply and demand defines our nation's energy crisis," says the report, a portion of which was released Wednesday night by the White House. "This imbalance, if allowed to continue, will inevitably undermine our economy, our standard of living, and our national security."

While Bush compared today's problems to the 1970s, energy experts have noted that there are plenty of supplies of crude oil and gasoline. In the 1970s, a disruption of oil imports caused long gas lines and fuel rationing.

The White House was releasing the report Thursday in connection with Bush's speech on the topic in St. Paul, Minn.

To sell his plan, Bush must navigate among hundreds of issue groups, governors and local officials with competing concerns.

Even before it was released, Democrats said the policy would endanger the environment and do nothing to lower prices now. Some Republicans demanded quick fixes not found in the report, fearing the public will blame them in 2002 congressional elections if energy prices soar.

Bush and Cheney are especially vulnerable to criticism because they made fortunes in the oil business.

Feeling the heat, Bush promised on Wednesday that federal regulators will ensure that "nobody in America gets illegally overcharged" for energy. His advisers said for the first time his policy might offer some short-term relief, but only if the promise of future supplies drives down prices among investors who speculate in oil trends.

"We're going to solve this problem," Bush said, previewing a report he said would be an honest, hard look at the reasons for the nation's energy shortages. "This isn't just a report that's going to gather dust."

Senate Majority Leader Trent Lott said he hoped to get the energy package approved and ready for Bush's signature by July 4. He conceded, however, that some recommendations, such as expanded drilling on federal land and taking private land for power lines, "will be hotly debated" by Congress.

As if to make Lott's point, House Minority Leader Dick Gephardt, D-Mo., said, "The president has no program for the short term, telling people they are on their own. At a time when consumers are paying record prices, at a moment when energy companies are making record profits, we have an obligation to the American people to address their concerns."

The half-inch thick report, complete with glossy pictures and pie charts, contains 105 recommendations -- some of which will go to Congress and others that will be carried out by executive order. Many table a sticky issue for further study by federal agencies.

The White House rhetoric is focused on poll-tested conservation initiatives, with aides noting that 42 of the recommendations offer incentives for people and businesses to curb their fuel demands. But the president's focus is on strategies to make the United States less reliant on foreign oil and less susceptible to aging electrical transmission systems.

The report says Bush will sign an executive order this week that directs all agencies to include in any regulatory action that could "significantly and adversely affect energy supplies" a detailed statement on the rules' impact.

A second order would require agencies to expedite permits for all energy-related projects, in effect nationalizing the policy that allows electricity-strapped California to set aside some clean-air regulations and build power plants.

Bush asks the Interior Department to study the "impediments" to drilling for oil and gas on public lands. He specifically calls for development of Alaska's Arctic National Wildlife Refuge.

He would spend $2 billion over 10 years to pay for clean-coal technology.

On nuclear power, Bush asked federal agencies to examine whether spent fuel from nuclear reactors can be reprocessed for the production of electricity. The technology, abandoned in the United States but used elsewhere, produces weapons-grade plutonium that can lead to national security risks.

Bush also is asking agencies to study whether nuclear plants undergoing facility improvement need federal reviews, as currently required. The Justice Department will be asked to study lawsuits pending over the so-called new source reviews.

The report calls for the "safe expansion" of nuclear energy by establishing a national repository for nuclear waste, but does not take a position on the controversial site in Nevada called Yucca Mountain.

The report details $10 billion in tax credits over 10 years, most of which go to conservation and projections involving renewable energies such as wind and solar power. Half the money is already in Bush's budget. About $1.5 billion will help facilitate the sale of nuclear power plants.

The biggest chunk of the $10 billion is a $4 billion tax credit for the purchase of hybrid and fuel cell vehicles.

The report directs the Transportation Department to review vehicle fuel economy standards, but said no changes would be made until the completion of a National Academy of Sciences study this summer. Bush advisers signaled that they might raise the standard for sports utility vehicles and small trucks, which under current rules are allowed less-stringent fuel requirment.

Automobile manufacturers are opposed to raising the standards.

By Associated Press

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