The Bush Administration's Energy Plan: A Farsighted, Balanced ApproachCommentary by H. Sterling Burnett
May 24, 2001
In formulating its national energy plan the Bush administration confronted a number of sobering facts. Energy is essential for our national economic growth. Yet while America has enjoyed an energy surplus for much the 20th Century, this is no longer the case.
The combination of strong economic growth since 1980, declining domestic fuel production, an aging energy delivery infrastructure, the closing of older power plants and increased regulatory barriers to new power plant construction have produced rising energy prices. During the next 20 years, U.S. oil consumption will grow by one-third and electricity demand could increase by more than 45 percent. If substantial action is not taken, the U.S. will soon confront Jimmy Carter-style energy shortages. That would be an economic catastrophe.
While the plan is not perfect, the President's energy task force did several things right. First, they recognized that California's energy woes were self-created, and that with intelligent action the nation could avoid California's fate. Second, they promoted innovative technologies intended to satisfy America's long-term energy needs while improving environmental quality. Third, they put together a balanced and comprehensive plan.
Of the 105 recommendations, 42 encourage conservation and environmental protection, while 35 would diversify the U.S. energy supply and modernize its antiquated infrastructure.
The conservation and environmental proposals include, improved efficiency standards for home appliances, tax credits for improving the energy efficiency of homes and offices, tax credits for purchasers of hybrid or fuel cell vehicles, reduced emissions from older coal fired power plants and increased funding for conservation and renewable energy programs.
The Bush energy team learned from California's predicament. California is a leader in conservation and energy efficiency, yet they were unable to meet their energy demands through conservation alone. Neither can the rest of the nation.
Accordingly, the Bush administration is reducing redundant regulations to bring between 1,300 and 1,900 new power plants on-line during the next 20 years. And because power plants require both a source of power and a way of getting the power to consumers, the plan diversifies and increases domestic energy production while upgrading the delivery system.
Nevertheless, critics attack the plan as a gift to Big Oil and Coal, and say that it ignores renewable sources of energy. Neither is true.
Coal is a plentiful and relatively inexpensive fuel used to generate more than 50 percent of the electricity in the U.S. Everyone not aligned with an environmental lobbying group recognizes that coal will continue to be a major source of energy in the future. Therefore, Bush has requested $2 billion in tax credits for clean coal technologies. This is hardly a "give away" to coal producers or utilities since they can only claim the credit if they use technologies that will reduce pollution.
The administration does, however, call for opening some additional public lands - including a small area in the coastal plain of the Alaskan National Wildlife Refuge - to oil and gas production and delivery. From the outraged response of environmentalists, you would think Bush had proposed using the Grand Canyon as a landfill.
Due to modern technologies, oil production and environmental quality are not incompatible. Just ask the Audubon society who allow oil and gas production on some of their most unique nature preserves. Oil accidents are uncommon and do not cause irreparable harm. As bad as the Exxon Valdez spill was, fewer birds were killed by that accident than are killed every year by the wind turbines driving California's much touted wind energy farms.
The plan also promotes renewable energy. For instance, it provides tax credits for energy from wild power and biomass resources, for the purchase of residential solar energy panels and for the energy produced by burning methane gas from landfills.
The rising energy prices is also due to the fact that no new refineries have been built in the U.S. in over a decade, our natural gas pipeline system is more than 20 years old and our electricity transmission system is 50 years old. While high gasoline prices are encouraging the construction of new refineries, the Bush energy plan would speed up the process by reducing redundant reporting requirements. The administration is also asking that federal energy agencies be granted eminent domain powers when necessary to seize private property for pipelines and transmission wires.
Congress will likely revise the plan significantly, limiting or eliminating some of the more controversial proposals. One can only hope that Congress will work with Bush to produce a farsighted a national energy policy.