Bush calling for action on ‘most serious energy shortage’


WASHINGTON, Reuters

U.S. President George W. Bush will issue a call to action on Thursday against “the most serious energy shortage since the oil embargoes of the ’70s” with heavier reliance on oil, coal and nuclear power and US$10 billion in tax credits for conservation measures.

Bush is to release his long awaited report on national energy policy, developed by a task force led by Vice President Dick Cheney, and deliver a major speech about it in St. Paul, Minnesota.

“America in the year 2001 faces the most serious energy shortage since the oil embargoes of the ’70s,” the White House said in an overview of the 163-page report. “A fundamental imbalance between supply and demand defines our nation’s energy crisis.”

The plan, already under attack by Democrats and likely to set off a months-long debate, offers no immediate relief for Americans paying record-high gasoline prices. Bush directed federal agencies on Wednesday to ensure against price gouging, while noting there was so far no evidence of that.

And the report warns that Californians, already facing rolling blackouts from electricity shortages, face a situation that is “likely to worsen this summer when demand will peak.”

High gasoline prices in recent weeks and predictions of a summer of rolling blackouts in California have made the energy issue a potent political battleground.

In answer to concerns that Americans are using too much gasoline, Bush will direct Transportation Secretary Norman Mineta to review and provide recommendations on fuel efficiency standards for vehicles with an eye toward tightening fuel economy standards.

Conservationists say the lack of an increase in fuel efficiency standards in recent years for light trucks and sport utility vehicles impedes reductions in energy use.

Automakers oppose more stringent standards. They are currently required to see their light duty trucks overall average 20.7 miles per gallon (33.3 kpg). By law cars must average 27.5 mpg (44.2 kpg). The standards were created in 1975 in response to the Arab oil embargoes that triggered long gas lines in America.

Bush will propose tax credits for fuel efficient “hybrid” vehicles that run on gas and electricity, and a tax credit up to US$2,000 for people to install solar panels in their homes, a senior U.S. official said.

The tax credits total US$10 billion over 10 years, US$4 billion of them for use of hybrid vehicles, the official said.

Bush will ask the Environmental Protection Agency to conduct a 90-day study whether to roll back a federal rule requiring state-of the-art pollution controls on upgraded power plants and refineries.

This provision of the Clean Air Act, known as “new source review,” had been a source of bitter fights between utilities and the EPA during the Clinton years and has generated federal lawsuits against electric utilities.

Bush will ask the Justice Department to review whether to continue the lawsuits, a senior U.S. official said.

He will ask the Interior Department to study impediments to opening up some federal lands for oil and gas drilling, including a small part of Alaska’s Arctic National Wildlife Refuge, a vast refuge seen by environmentalists as the last great pristine American wildlife area.

Also up for review for possible drilling is Alaska’s National Petroleum Reserve, a vast 23-million acre (9.3 million hectare) site created in 1923 to provide emergency petroleum supplies for the U.S. Navy.

To deal with regional shortages of gasoline, Bush will ask EPA administrator Christine Todd Whitman to review the patchwork of fuel formula regulations to assess their environmental benefit and whether the rules limit distribution of gasoline supplies.

Bush would streamline the licensing of new nuclear plants as a way to speed development of what the White House feels could be a safe, major source of electricity.

He will also propose US$1.5 billion in tax incentives to facilitate the sale of nuclear power plants, and he will request US$2 billion over 10 years to help develop technology to burn coal, plentiful in America, with less pollution.