Bush Energy Plan Seeks More Nuclear Power, Aid for Poor

By RICHARD SIMON, GREG MILLER and JAMES FLANIGAN

May 17, 2001 12 AM PT

TIMES STAFF WRITERS

WASHINGTON —

Declaring that America faces its most serious energy shortage since the 1970s, President Bush today unveils a national energy plan containing 105 specific recommendations, from greater reliance on nuclear power generation to bigger utility bill subsidies for low-income households.

Bush, who will present the final version of the plan at a power plant in St. Paul, Minn., intends to act within days to implement the first recommendations. He will sign executive orders directing federal agencies to expedite permits for energy-related projects and requiring them to conduct “energy impact” assessments of big regulatory proposals, an administration official said Wednesday.

A key component of the plan, sources said, would be an ambitious effort to connect the hodgepodge of local electric utilities into a national grid that would eliminate bottlenecks and allow for more efficient transmission of electricity to areas where it is needed most.

Opposition could emerge to the White House’s proposal to create a seamless national electricity grid. States are expected to oppose federal legislation that would override state regulation of transmission lines. But experts said that the current arrangement of public- and investor-owned systems often presents barriers to efficient power-sharing among utilities.

Under another controversial proposal aimed at boosting the power infrastructure, federal authorities would be granted the power of eminent domain to acquire private property for new transmission lines.

“Recent and looming electricity blackouts in California demonstrate the problem of neglecting energy supply,” the report states. “They also foretell the consequences of failing to implement a long-term energy plan for our nation as a whole.”

But the 163-page blueprint, which was drafted by a task force headed by Vice President Dick Cheney, offers no immediate solutions for California’s troubles. And it defers recommendations on some of the more contentious issues facing the administration, such as a dispute over pollution controls for renovated power plants and refineries, and fuel-economy standards for gasoline-guzzling sport-utility vehicles. Both issues will be studied further.

The report calls for, among other things:

* Opening up Alaska’s Arctic National Wildlife Refuge to “environmentally regulated exploration and production using leading-edge technology” and reviewing what other federal lands could be opened to oil and gas exploration.

* Spending $2 billion over the next decade for research on “clean-coal” technologies designed to reduce emissions of pollutants that contribute to acid rain and smog.

* Streamlining the approval process for new power plants and gas pipelines without rolling back existing environmental restrictions.

* Boosting energy assistance for low-income households to $1.7 billion a year, a $300-million increase. The amount would rise even more if federal lands are opened to oil exploration.

* Providing tax credits for purchases of hybrid gas-electric and fuel-cell vehicles, and use of renewable energy sources such as wind, sun and agricultural waste.

* Supporting a “North American energy framework” to expand cross-border oil and gas pipelines and electrical grid connections with Mexico and Canada.

The plan directs the Environmental Protection Agency administrator to confer with local and state officials on the feasibility of reducing the number of formulas used around the country for combining gasoline and additives. The conflicting recipes have been blamed for contributing to recent gasoline shortages and price spikes.

The report proposes expanded reliance on nuclear power but takes no position on the controversy over placement of a proposed nuclear waste disposal site beneath Nevada’s Yucca Mountain.

The administration also will ask federal agencies to examine whether spent fuel from nuclear reactors can be reprocessed for the production of electricity. But that proposal is certain to face fierce opposition from activists who believe it could endanger the environment and contribute to nuclear weapon proliferation.

“They are [considering] what has to be the most expensive and the most dangerous aspect of nuclear technology,” said Paul Leventhal, president of the Nuclear Control Institute. Reprocessing involves recovering plutonium, a highly carcinogenic substance, from spent uranium fuel so it can be reused as a fuel source. But if plutonium were to fall into the wrong hands, it could be used to create nuclear weapons.

The United States has had a policy against reprocessing dating back to the Gerald R. Ford administration, Leventhal said, largely to discourage developing countries from using the technology.

In an effort to address the concerns of environmentalists, the administration will direct federal agencies to support continued research into global climate changes.

Bush, who has come under increasing pressure to take immediate action to contain rising energy prices, declared that his energy plan will help consumers in the short term.

And he pledged to ensure that “nobody in America gets illegally overcharged” for energy, adding that he expected the Federal Energy Regulatory Commission to “be vigilant” in dealing with wholesale electricity prices charged in California.

After insisting for weeks that there was little the administration could do in the short term to combat energy price spikes and supply shortages, White House officials changed course and offered assurances that the energy plan would provide immediate relief.

“We’re going to solve this problem,” Bush told reporters after his energy task force presented the final report in the White House Cabinet Room. “This isn’t just a report that’s going to gather dust.”

The plan includes 42 recommendations dealing with conservation, environmental protection and development of alternative sources of energy; 35 proposals designed to increase domestic supplies of oil, gas, coal, nuclear power and other conventional energy sources; and 25 involving international initiatives to increase energy production.

“Ours is a nation that can lead the world in innovative conservation measures, and we provide incentives to do that,” said Bush, whose administration has been accused of slighting conservation and alternative fuels. “Ours is a nation that can explore in technologically friendly ways, and we will show the world how to do so.”

Bush’s comments reflected growing pressure from congressional Republicans to counter the perception that the administration had nothing to offer Californians whose lives have been disrupted by the electricity crisis or motorists pinched by rising gasoline prices across the country.

Bush said that he cares about power-strapped California and defended his administration’s response to the state’s troubles.

Bush said that he, EPA Administrator Christie Whitman and Energy Secretary Spencer Abraham had reacted quickly to appeals for help from Gov. Gray Davis.

“He said help us build plants in the state of California, and we did, and we expedited the construction of plants,” Bush said. “And so the quicker supply gets on, the easier it’s going to be for the consumers in the state of California.”

But the president once again rejected proposals to impose price controls, as sought by California officials to contain wholesale electricity costs. “Price controls do not increase supply, nor do they affect demand,” he said.

Bush said he would make sure that the FERC takes appropriate action against suppliers who do not charge “fair and reasonable” rates for electricity sold in California. He noted that the FERC has already ordered refunds for excessive prices charged in California, although state officials say the refunds fall far short of the actual overcharges by suppliers.

In Sacramento, Davis expressed disappointment with the administration’s approach to energy policy. “Mr. President, runaway energy prices are not just a California problem. With all due respect, I once again urge you to stand up to your friends in the energy business and exercise the federal government’s responsibility to ensure energy prices are just and reasonable.”

Some members of Congress voiced similar sentiments.

“For Big Oil and other suppliers, the Bush energy plan is a dream come true,” said Sen. Dianne Feinstein (D-Calif.). “But among those most left out by the plan are the people and businesses of California who have been under siege by electricity and natural gas marketers bent on gouging every cent they can from a broken energy market that the Bush administration has refused to try to fix.”

Addressing the growing clamor over rising gasoline prices, Bush called on the Federal Trade Commission to “make sure that nobody in America gets illegally overcharged” at the pump.

Earlier, White House spokesman Ari Fleischer said the plan’s recommendations to increase oil and gas production over the long term could reduce gasoline prices almost immediately. “Spot markets react to presumptions about future supply,” he said. In addition, he said, the plan proposes conservation measures that could produce short-term benefits.

On Capitol Hill, Cheney assured GOP lawmakers attending a closed-door briefing that he and Bush would travel to California soon to explain their energy priorities.

Times staff writers Edwin Chen, James Gerstenzang, Janet Hook and Elizabeth Shogren contributed to this story.