President issues national energy plan

Published July 1, 2001

President Bush on May 17 announced a comprehensive energy program designed to provide long-term solutions to the nation’s current energy woes. The program takes a multifaceted approach to meeting America’s energy needs, encouraging increased production, updated infrastructure, “clean” energy sources, efficient technology, and “painless” conservation.

Bush said his program would “help bring new supplies of energy to the market, and we will be encouraging Americans to use more wisely the energy supplies that exist today.”

The proposal comes after months of study by a panel of scientists, policy analysts, and politicians, headed by Vice President Dick Cheney. Bush made a concerted effort to convey that the program took into consideration a multitude of interests, harmonizing business, consumer, and environmental concerns.

Increased production

Central to the Bush plan is increased energy production. The President called for a renewed investment in nuclear energy, emphasizing that nuclear energy production emits no greenhouse gases or other atmospheric pollutants. Bush would streamline the re-licensing of safe reactors and renew a law protecting reactor owners from unlimited liability as a result of any catastrophic accident.

The Bush program also calls for increased oil and natural gas drilling on public and private lands. Bush argued drilling can be safe, efficient, and environmentally friendly. Areas targeted for new drilling include the Alaska National Wildlife Refuge and the Gulf of Mexico. The President’s plan to drill in these and other areas has already sparked heated opposition from anti-market environmentalists, who would prefer to preclude any new energy production.

Further increases in production would be facilitated by the construction of 1,300 to 1,900 new power plants over the next 20 years. The construction and expansion of power plants may be complicated by federal air pollution regulations as well as local issues. However, Bush is proposing a more navigable environmental review process that would allow new plants to be constructed more quickly than is currently possible. Moreover, Bush emphasized that modern technology assures increased production does not have to come at the expense of the environment.

Infrastructure improvements

Production increases under the Bush plan would be matched by infrastructure improvements. The program envisions the construction of new pipelines and power grids to transport energy from region to region. Additionally, a significant increase in refineries is proposed to turn crude oil into usable fuel.

Bush argued that blaming OPEC for high gasoline prices misses the mark because America currently has a limited capacity to refine crude oil into gasoline and other end uses. Until the nation increases its numbers of refineries, any reduction in OPEC crude oil prices will have only a limited effect on the prices American consumers pay for gasoline.

“The price of crude oil has got something to do with the price of gas, but not nearly as much as we haven’t built a refinery in years,” Bush stated. “We need more refining capacity.”

Bush’s plan to build more refineries will meet environmental and regulatory obstacles. The Bush program would have the federal government take a second look at “all the regulations that discourage development.”

Efficient technologies

Bush touted efficient new technologies as a means to “squeeze as much out of a barrel of oil as we have learned to squeeze out of a computer chip.” Efficient technologies would be most emphasized in maximizing efficiency in the nation’s energy infrastructure. Modern technology in new refineries, for example, would be supplemented by modern technology in new pipelines and power grids.

The Bush program would also direct the Environment Protection Agency (EPA) to facilitate the construction of co-generator power plants that produce both electricity and heat, rather than just one or the other. The co-production of energy and heat would save significant energy in comparison to conventional power plants.

“Clean” energy sources

Tax incentives for research and development of solar, biomass, methane, and other technologies were included in the Bush plan. Such “clean” energy sources have long been championed by anti-market environmentalists, but have also been criticized for offering more promise than substance. The Bush program would encourage greater efforts to make these sources economically viable and to bring these sources into the energy mainstream.


Finally, the Bush program would encourage a great deal of energy conservation. Responding to critics who anticipated little or no conservation efforts in the plan, the President outlined several specific steps that would conserve the energy that is produced and delivered.

Bush called for tax incentives for automobiles using hybrid energy sources. Although internal-combustion engines continue to dominate the American market, Toyota and Honda have introduced sedans using combinations of gasoline and electric engines, and all three domestic car companies have announced plans to produce hybrids in 2003. Bush’s program would encourage a proliferation of these vehicles in the coming decade.

Conservation efforts would also involve the federal Energy Star efficiency program. The current program focuses on appliances and office buildings. Bush would expand the program to include schools, health care facilities, stores, and homes.

Moreover, the Bush program directs EPA Administrator Christie Todd Whitman to develop and maintain a strategy to increase public awareness of the “sizable savings” that energy efficiency offers to homeowners.

“Some think that conservation means doing without,” Bush said in a radio address shortly before announcing the program. “That does not have to be the case. It can mean building sensors into new buildings to shut the lights off as soon as people leave a room. It can mean upgrading the transmission lines that deliver electricity to your home so less is wasted on the way. It can mean encouraging homeowners to invest in energy improvements.”

Proposal attracts opposition

The program engendered spirited opposition among Democrats in Congress and liberal environmental groups with records of opposing increased energy production. “Energy efficiency has to be part of a balanced energy strategy,” said Senator Jeff Bingaman (D-New Mexico).

Representative Jim Moran (D-Virginia) said conservation and efficiency programs have been “extraordinarily successful” and have paid for themselves. He criticized the administration for cutting funding for such programs, citing a study showing an instance where $7 million in efficiency investments resulted in $51 million in energy savings.

House Minority Leader Richard Gephardt (D-Missouri) emphasized environmental protection as opposed to production increases. Gephardt predicted any Bush administration effort to emphasize “increasing supply through drilling in environmentally sensitive areas, I don’t think it will go well in Congress.”

Widespread support for the program

Unlike their Democrat counterparts, congressional Republicans have already pledged to enact the majority of Bush’s proposals. Senate Majority Leader Trent Lott (R-Mississippi) pledged to bring legislation consistent with the Bush proposal to the Senate floor by late June. “It will take priority over just about anything that’s in the mill,” Lott said.

Republicans in the House also have acted on the goals of the Bush program. House Energy and Commerce Committee Chairman Billy Tauzin (R-Louisiana) and Rep. Joe Barton (R-Texas) were working on a similar proposal while the Bush team was formulating its program. Tauzin and Barton proposed to increase energy production, while simultaneously placing a heavy emphasis on conservation and renewable energy.

Outside of Congress, analysts were generally supportive of the President’s proposals.

Americans for Balanced Energy Choices (ABEC), a nonprofit organization that advocates on behalf of energy policies balancing environmental protection with economic growth, expressed “strong optimism” about the Bush plan, including its incorporation of environmentally friendly production increases. “Any comprehensive plan must promote investments in energy efficiency, but must also recognize that America cannot ‘conserve’ its way out of our energy crunch,” stated ABEC President Steve Miller.

The Competitive Enterprise Institute (CEI), a Washington, DC-based think tank, commended the Bush plan “for emphasizing the need for plentiful, affordable energy for American consumers.” Noted Myron Ebell, CEI’s director of global warming and international environmental policy, the energy plan “represents an important move away from the disastrous anti-energy policies of the last decade.”

Anti-market provisions questioned

While CEI generally praised the plan, the group did express reservations about some anti-market aspects of the plan. According to CEI, “While the structural reforms being proposed for utility regulation are extremely encouraging, not every aspect of the plan is compatible with free-market ideas. The proposal to increase subsidies for inefficient fuels and research designed to benefit particular industries are both the least effective and the most costly aspects of the plan.”

Chuck Cushman, executive director of the American Land Rights Association, expressed concern that the plan delegates power from elected officials to the Federal Energy Regulatory Commission, which in turn delegates power to individual power companies and, ultimately, individual contractors. “Private property rights and community interests stand to get waylaid in the condemnation process,” Cushman warned. The Bush proposal significantly increases the federal government’s right to condemn private property for the construction of power lines and energy infrastructure. “We need accountability” if the government exercises such expanded power, urged Cushman.

Congress sure to alter program provisions

In light of growing energy concerns among American voters, Republicans predicted passage of some form of the Bush program. Although the administration may have to compromise some in the production vs. conservation equation, Republicans remained confident the public would support a long-term energy program with significant emphasis on heightened energy production.

“This is a situation that is going to require some long-term planning to have a stable future,” stated President Bush. “This is a situation that has been developing over the years, and is going to take a while to correct.”

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