Bush's Energy Policy Includes Dire Predictions of Summer Woes

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05/16 22:28 Bush's Energy Policy Includes Dire Predictions of Summer Woes

By Holly Rosenkrantz and David Morris

Washington, May 16 (Bloomberg) -- President George W. Bush's energy task force says power shortages might lead to blackouts in New York City and parts of New England this summer, higher food prices and not enough gasoline for all of California's drivers, according to a summary provided by the administration.

While conservation efforts could begin right away, most of the recommendations in the national energy policy Bush will officially unveil tomorrow in Minnesota won't take effect in time to help this summer, a senior administration official told reporters.

The report says the U.S. consumption of energy 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, streamlined regulations to allow faster construction of power plants and pipelines, and tax breaks to promote nuclear power, are designed to help over the next decade or more, according to documents provided by the White House.

``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 of the proposals. They were developed by Vice President Dick Cheney and other Cabinet officials after five months of meetings with company executives, environmental advocates and members of Congress.

Blackouts

The forecast for trouble 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 reports.

The South probably will avoid blackouts, although spot power shortages are possible on the hottest days, the report notes.

The administration official, who discussed the report on the condition of anonymity, said farmers would feel the impact of energy shortages by paying higher prices for fertilizer, gas 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.

Power Plant Permits

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

Bush's proposal is being released as lawmakers from both political parties are calling for quick action to ease rising prices at the gasoline pumps and to end power shortages 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.

The 163-page report doesn't explicitly call for an easing of environmental regulations. It does, though, direct Environmental Protection Agency administrator Christie Whitman to review some measures that officials said she likely will scale back. At the same time it recommends new standards for some pollutants.

Clean-Air Rules

For example, it recommends 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.

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.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&T=markets_bfgcgi_content99.ht&s2=ad_right1_windex&bt=ad_position1_windex&middle=ad_frame2_windex&s=AOwM3ShYxQnVzaCdz

-- Martin Thompson (mthom1927@aol.com), May 16, 2001

Answers

More serious by the minute, it seems. It almost sounds like impending y2k, incarnate.

-- JackW (jpayne@webtv.net), May 16, 2001.

I read this year that Mexico is looking for natural gas from USA because their energy demand is rapidly increasing. Don't have a URL - it was a couple of months ago. If my recollection is correct, then I'm not sure they have the ability to increase their exports north.

Oil may still be okay, if their production has not fallen off. Has it?

-- Margaret J (mjans01@yahoo.com), May 17, 2001.


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