 May 17, 2001In Energy Plan, Bush Urges News Drilling, Conservation and Nuclear Power ReviewBy DAVID E. SANGER
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 extracted. "America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970's," the administration's energy report states. 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 Thursday. 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 environment." The overview released tonight states that federal regulation of the nation's energy producers has unduly inhibited production and increased prices. "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 fuel efficiency." 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 encouraging. "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 report says. 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 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 expensive. 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. end
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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.
