ASHINGTON, May 16 —
President Bush's long-awaited energy plan proposes loosening regulations
on oil and gas exploration, conservation-minded efforts like a review of
gas mileage standards and a $4 billion tax credit for a new generation of
highly fuel efficient cars, and urges a reconsideration of a quarter-
century ban on the reprocessing of nuclear fuel.
With a declaration that the energy problems threaten the nation's
economy and security, the Bush plan also orders a sweeping review of
public lands to determine whether more energy resources can be
"America in the year 2001 faces the most serious energy shortage since
the oil embargoes of the 1970's," the administration's energy report
Without action, it continues, projected energy shortfalls in coming
years "will inevitably undermine our economy, our standard of living and
our national security."
The proposals are among 105 initiatives outlined in the
administration's energy report, said a senior government official who
briefed reporters on its contents tonight. The White House released an
eight-page overview of the document, which will be distributed in full on
The official said Mr. Bush would also issue two executive orders later
this week directing all federal agencies to consider the effects of all
new regulations on energy production and to expedite permits for all
energy projects "while remaining mindful of protecting the
The overview released tonight states that federal regulation of the
nation's energy producers has unduly inhibited production and increased
"Regulation is needed in such a complex field, but it has become overly
burdensome," the report says. "Regulatory hurdles, delays in issuing
permits and economic uncertainty are limiting investment in new
facilities, making our energy markets more vulnerable to transmission
bottlenecks, price spikes and supply disruptions."
Mr. Bush will also order Interior Secretary Gale A. Norton, an
outspoken proponent of seeking new sources of energy on federal lands, to
"look at any impediments" that discourage exploration for oil and gas.
The report repeats Mr. Bush's commitment to explore in the Arctic
National Wildlife Refuge — a proposal that seems unlikely to survive in
Congress — and also urges a review that will include other locations in
Alaska, the Rocky Mountains and along the Gulf Coast.
The report also urges the revision or reinterpretation of a major
clause of the Clean Air Act that requires long government review of any
modifications of power plants that affect their emissions. The senior
government official, who was deeply involved in the development of the
plan, argued tonight that the "new source reviews" by the Environmental
Protection Agency are a "time-consuming process" that often "discourage
The Justice Department will also be ordered to review several multi-
million-dollar lawsuits brought by the Clinton administration against
utilities accused of ignoring the law.
One official of an environmental group said the report was about what
he had expected, and he predicted that conservation organizations would be
highly critical of it.
"This has just a lot of opportunity for mischief from the energy
producers and no real solid commitments for the green components," the
official, David G. Hawkins, senior lawyer for the Natural Resources
Defense Council, said.
Mr. Hawkins said he was "astounded" that the policy would recommend a
review of legal actions now under way on utility emissions, calling it
"political interference with law enforcement."
Mr. Bush is to announce his plan on Thursday morning at an innovative
energy plant in St. Paul. But even before he begins his campaign for a
national energy policy, he has touched off a heated political argument
between Democrats and Republicans over how to balance environmental
concerns against growing energy needs, and whether to impose temporary
price caps in places like California, where a deregulation program and
soaring demand has sent prices rocketing.
Democrats have urged the use of such controls, while Mr. Bush will
argue "vociferously" on Thursday, one aide said, that the controls would
only discourage the production of more electricity.
Mr. Bush's report adopts a tone that is by turns admonishing and
"The complacency of the past decade must now give way to swift, but
well-considered, action," it says in its introduction, echoing themes that
Mr. Bush and Vice President Dick Cheney, who headed the task force, have
hit in recent weeks.
"Present trends are not encouraging, but they are not immutable," the
Then, in a clear effort to separate Mr. Bush's approach from President
Jimmy Carter's politically disastrous calls for household austerity during
the energy crises of the late 1970's, it adds: "Our country has met many
great tests. Some have imposed extreme hardship and sacrifice. Others have
demanded only resolve, ingenuity and clarity of purpose. Such is the case
with energy today."
The decision to offer a relatively hefty tax credit for "hybrid" cars,
which use a combination of gas and battery power, is bound to help both
Detroit and two Japanese automakers — Honda and Toyota — which are already marketing such vehicles in the
United States. But they will be less enthusiastic about orders by Mr. Bush
for the government to review the federal standards for automotive fuel
efficiency, though the report makes no commitment that those standards
will be raised.
The plan also calls for a new evaluation of nuclear reprocessing, a
technology that takes advantage of the fact that as reactors consume
uranium, they also produce plutonium. If the plutonium is chemically
scavenged from the fuel, it can be used to run reactors.
But the technology has drawbacks. The work is dirty, with the threat of
radioactive releases, and it is expensive. For the last decade at least,
it has been far cheaper to fuel reactors with new uranium than to recover
plutonium. And while uranium fuel used in power reactors cannot be used to
make a bomb, plutonium can, raising the threat of world commerce in a
material that could be diverted by countries — or terrorist groups — that
want a bomb.
Britain, France and Japan currently reprocess fuel, although the
British are considering ending the practice because it is so
But reprocessing can reduce the volume of plutonium requiring disposal,
which is important because plutonium is so long-lived and difficult to
store safely. Some opponents of the technology said today that they
believed it had been included in the Bush plan as a sop to Nevada, where
the Energy Department is trying to build a waste repository. But
reprocessing would not eliminate the need for such a repository.
In a section of the report on the foreign policy implications of a new
energy strategy, the administration calls for a review of American policy
on sanctions, clearly with an eye toward lifting those sanctions that have
prevented American companies from exploiting resources in countries that
violate human rights or are openly hostile to the United States. It says
there will be no change in sanctions against Iraq, Iran and Libya. But
that leaves open the possibility of lifting controls on Azerbaijan and
Myanmar, formerly known as Burma.
It also calls for cooperation with Canada on building a pipeline that
could bring more natural gas into the United States.
The report mixes several existing initiatives with new ones,
particularly in the area of conservation. For example, of $10 billion in
proposed tax credits over the next 10 years, $5 billion in credits are
already in the budget or the result of extending existing ones.
Other programs get modest increases. The administration recommends $300
million in new money for the Low Income Home Energy Assistance Program and
calls for funneling some oil and gas royalty payments, which companies pay
the federal government for extracting resources on public land, to the
program for the poor.
Similarly, in an effort directed toward environmentalists, it would
commit royalties from any energy extracted in the Arctic National Wildlife
Reserve for land conservation.
There are no credits or other tax breaks for oil or gas producers, or
electric utilities — a reflection of the sensitivity of the White House to
criticism that Mr. Cheney and other top officials spent their
private-sector years in the energy industry. But the tone of deregulation,
reassessment of the merits of the Clean Air Act and the emphasis on
opening of federal lands to more energy production — everything from wind
power to oil and gas drilling — provides those industries with effective
subsidies totaling in the billions of dollars.
Much of the report simply urges companies to build, build and build
some more, including 38,000 miles of new gas pipelines, 255,000 miles of
distribution pipelines and a new power plant every few days for the next
20 years. But for every such proposal, Mr. Bush's team carefully inserted
proposals for expanding the use of renewable fuels, from geo- thermal
energy sources to the methane produced in landfills.
The nuclear power industry gets one major concession: a tax break that
would eliminate the double taxation of funds put aside for decommissioning
plants. Those taxes have been a deterrent to buying and selling nuclear
plants. It commits $2 billion over 10 years to a clean-coal technology
program in the Department of Energy.
It urges the Federal Energy Regulatory Commission to speed the
licensing of hydroelectric power plants — Mr. Bush is to visit one on
Friday in Pennsylvania — and it also seeks "market-based incentives" to
reduce pollutants that cause global climate change.
But this winter Mr. Bush rejected any American participation in the
Kyoto treaty on global warming, which would have mandated cuts in American
emissions, at considerable economic cost.