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The President’s Energy Policy, v2.0

President Bush today outlined his current vision for energy independence, a broad roadmap relying on the use of advanced technology to increase US energy production primarily from nuclear and fossil sources, but with some support for renewables and conservation.

...The fundamental problem is this: Our supply of energy is not growing fast enough to meet the demands of our growing economy.

Over the past decade our energy consumption has increased by more than 12 percent, while our domestic production has increased by less than one-half of 1 percent. A growing economy causes us to consume more energy. And, yet, we’re not producing energy here at home, which means we’re reliant upon foreign nations. And at the same time we’ve become more reliant upon foreign nations, the global demand for energy is growing faster than the growing supply. Other people are using more energy, as well. And that’s contributed to a rise in prices.

The President’s first area of focus is on the further development of the fossil and nuclear energy sources that constitute the majority of the supply in the US (and globally). He called for:

  • The Department of Energy (DOE) to work on changes to existing law that will reduce uncertainty in the nuclear plant licensing process, and also provide federal risk insurance that will protect those utilities building the first four new nuclear plants against delays that are beyond their control.

    “A secure energy future for America must include more nuclear power.”

  • Federal agencies to work with states to encourage the building of new refineries, perhaps on closed military facilities, and to simplify the permitting process for such construction.

    “By easing the regulatory burden, we can refine more gasoline for our citizens here at home. That will help assure supply and reduce dependence on foreign sources of energy.”

    [Comment: while increasing the number of refineries could decrease the amount of refined product imported, the oil for those refineries still needs to come from someplace. Given the ongoing decline in US production, that someplace would be overseas. Following the meeting between Saudi Crown Prince Abdullah and President Bush several days ago, Saudi foreign policy adviser Adel al-Jubeir stated that oil supplies are adequate and high gas prices are partly the result of a lack of refining capacity in oil-importing nations. “What we see is a shortage of refining capacity.” (Bloomberg) An increase in refineries doesn’t address the more fundamental issue of demand for oil equalling and surpassing supply.]

  • Drilling in ANWR. (Earlier post)

  • Congress to make clear FERC’s (Federal Energy Regulatory Commission) federal authority over state and local authorities with respect to the placement and construction of new Liquefied Natural Gas (LNG) terminals to increase (imported) supply and reduce prices.

    “Thanks to [LNG] technology, our imports of liquefied natural gas nearly doubled in 2003. Last year, imports rose another 29 percent... Congress should make it clear to the Federal Energy Regulatory Commission its authority to choose sites for new terminals, so we can expand our use of liquefied natural gas.”

    [Comment: increasing reliance on imported energy sources to decrease reliance on imported energy sources seems a bit contradictory. That said, natural gas supply is looming as a major factor, and my guess is that whatever bill emerges from Congress will indeed empower FERC to decide where to place LNG terminals as a matter of national interest.]

  • Support for his Clean Coal initiative.

The “second essential step toward greater energy independence,” according to the President, is the development of new sources of energy, especially for transportation: hydrogen, ethanol and biodiesel.  Bush is also seeking $1.9 billion over 10 years for tax incentives for renewable energy technologies like wind, as well as residential solar heating systems and energy produced from landfill gas and biomass.

Energy conservation moved from being a point of personal virtue (as described by VP Cheney during the first term) to a “third essential step.” The President said he will support the extension of his proposed tax credits for energy-efficient hybrid and fuel-cell vehicles to include clean-diesel vehicles.

The President made no mention of increasing standards for fuel efficiency.

Republican senators indicated that they would incorporate most if not all of the President’s proposals in the Senate Energy Bill currently in process.




I find it interesting, to say the least, that Bush is talking about extending the tax rebates for hybrids and adding rebates for clean diesel, but not pushing for higher CAFE standards. It feels a lot like a tradeoff--the gov't is giving people incentives to buy types of vehicles that non-US companies excel at making, so to compensate they're not requiring the US carmakers to increase the fuel efficiency of their products. Sounds like a VERY shortsighted policy to me...

john mcconnell

Is it really good for America to promote programs that will do nothing in the short-term, and increase our dependence on non-renewable resources in the long-term?

Hopefully people will recognize this as another one of the presidents non-solution solutions.


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