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05/17 00:01

Bush to Warn of Energy Crisis, Propose Increasing U.S. Supply

By Holly Rosenkrantz and David Morris

Washington, May 17 (Bloomberg) -- President George W. Bush's energy task force report warns that the U.S. faces an energy crisis and recommends easing regulations that block the construction of coal, electric, gas and nuclear power plants.

While conservation efforts could begin right away, most of the recommendations in the national energy policy, which Bush will release today in Minnesota, won't cause energy prices to drop or western power shortages to ease by this summer, a senior administration official told reporters.

``America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s,'' the report says. Without action by the government, energy shortfalls will ``undermine our economy, our standard of living and our national security.''

Bush is proposing his new energy strategy as members of Congress from both political parties are calling for quick action to halt rising prices at the gasoline pumps and to solve shortages of electrical power that have caused blackouts in California. Yet most of the benefits of his energy plan go to companies rather than consumers. Utility and oil companies such as Duke Energy Corp., Exxon Mobil Corp., and Enron Corp. would benefit from Bush's proposals to build more gas refineries, pipelines and transmission lines, and more coal and nuclear powered plants.

``My plan helps people in the short term and the long term'' and relies on ``our adherence to free enterprise and our willingness to conserve,'' Bush said on Wednesday.

Opposition Forms

Many of the recommendations match proposals that Bush laid out during his presidential campaign, and Democrats and some Republicans have already said they would oppose them. Even before the report was released, opponents criticized the administration's emphasis in public statements on drilling for more oil and gas and increasing reliance on nuclear power. Democratic lawmakers such as House Minority Leader Richard Gephardt called for caps on electricity prices to help western states and more incentives for conservation.

Vice President Dick Cheney, who lead the task force of Cabinet officers and staff, has said conservation will not be sufficient to match supply with demand.

The 163-page report says the U.S. energy consumption will increase by about 32 percent by 2020. Most the of the 105 recommendations in Bush's plan -- including $10 billion in tax credits over 10 years and the easing of regulations to allow faster construction of power plants and pipelines -- are designed to help meet demand over the next decade or more, according to documents provided by the White House.

The forecast is spelled out in a section of the report called ``Regional U.S. Energy Challenges.'' In the Northeastern U.S., the report says 11 natural gas turbines must be built ``to avoid blackouts in New York City this summer,'' and conservation efforts are needed to avoid a similar problem on hot days in New Hampshire and Connecticut.

In the Western U.S., blackouts are ``likely'' to become more frequent in California and ``gasoline could be in short supply this summer in California and other states,'' the task force report says. The South probably will avoid blackouts, although spot power shortages are possible on the hottest days, the report notes.

A Ripple Effect

The administration official, who briefed reporters on the condition of anonymity, said farmers would feel the impact of energy shortages by paying higher prices for fertilizer, fuel for tractors and water to irrigate fields. The costs will result in higher food prices in much of the country, the official said.

Bush's energy strategy asks agencies to take steps that may lead to scaling back some environmental regulations. It calls for $10 billion in tax breaks for energy conservation and production, including $1.5 billion to promote the use of nuclear power, the official said.

As part of the policy Bush will sign two executive orders this week that call for speedier issuing of new power plants permits, and for assessing energy demands as part of the review process for new regulations, senior government officials said.

The task force directs Environmental Protection Agency administrator Christie Whitman to review some regulations, which the officials said probably means they will be scaled back. At the same time it recommends new standards for some pollutants.

For example, it calls for a review of clean-air requirements to help refiners meet gasoline demand. Companies including Conoco Inc. and Exxon Mobil have said that federal and local clean-air rules require production of different blends of gasoline, making distribution complex and expensive.

Increasing Supply

In addition, the report recommends that:

-- Tax breaks should be given to promote the use of renewable energy sources such as wind and solar power. All told, the tax breaks recommended in the report are worth $10 billion over ten years. $5 billion of those incentives would be new money.

-- Congress should be asked to allow drilling for oil in about 1.5 million acres, or 8 percent, of Alaska's Arctic National Wildlife Reserve. Bush has already proposed this, and has acknowledged that opposition in Congress means approval is unlikely. The report calls for a broader review by the Interior Department of U.S. land for new sources of oil.

-- Congress should expand the federal government's authority to use the law of eminent domain to take private land so more electric transmission lines can be built. That law already allows the government to appropriate private property in places where it wants to build pipelines.

-- Energy trade with Mexico and Canada should be increased, and sanctions against oil producing countries like Libya and Iran should be reviewed. Bush has said he doesn't think sanctions against Libya and Iran should be lifted.

-- The administration delay deciding whether to change the efficiency standards for light trucks and sports utility vehicles until the National Academy of Sciences completes a study on the issue this summer. Transportation Secretary Norman Mineta, who helped develop Bush's energy policy, has said he wants Congress to lift a freeze imposed on vehicle efficiency standards, a move that could open the door to rules mandating greater fuel mileage.

-- The U.S. should review of a ban on the processing of nuclear fuel.

-- The Justice Department should review lawsuits from the Clinton administration against utilities that were accused of violating the Clean Air Act.

-- (in@energy.news), May 17, 2001

Answers

It's time to put a stop to this fool and his cronies before they undo all of the enviromental progress we have made in the past 30 years.

-- Cherri (jessam5@home.com), May 17, 2001.

"The Justice Department should review lawsuits from the Clinton administration against utilities that were accused of violating the Clean Air Act."

Is this the same "Justice" Department that "reviewed" the last election, and our 4th Ammendment rights? Oh boy! I can't wait for them to clear up the confusion about how much clean air we actually need to live!

-- Dumbya's Department of Justice for Corporate Fascism (bribes give us a new perspective @ on. your case), May 17, 2001.

"Yet most of the benefits of his energy plan go to companies rather than consumers. Utility and oil companies such as Duke Energy Corp., Exxon Mobil Corp., and Enron Corp. would benefit from Bush's proposals to build more gas refineries, pipelines and transmission lines, and more coal and nuclear powered plants."

Duuuuh! What took so long for you morons to figure this out? Do you think it's just a coincidence that Duke raised their prices from $30 to $1900 per killowatt as soon as Dumbya took office? The Bush family has $$$millions invested in these companies!

-- (Americans are being scammed @ "big. time"), May 17, 2001.

Someone on this thread forgot about the Iranian oil cutoff of 1979 and forgot that OPEC increased oil prices in 1979 by more than 50%.

Carter was not responsible for the 1979 energy crisis. Nixon was not responsible for the 1973 energy crisis.

-- History (of@the.'70s), May 17, 2001.

Sorry, wrong thread. It was this thread I was talking about.

-- History (of@the.'70s), May 17, 2001.