Bush Details Energy Plan, Calls for Boost in Supplies

President Bush hit the road Thursday to begin promoting a sweeping energy policy that calls for aggressive development of fossil fuels and nuclear power, but he faces pitched battles with environmentalists at nearly every turn.

Bush said the administration’s energy plan, the product of a Cabinet-level task force headed by Vice President Dick Cheney, would yield an array of “abundant and affordable and reliable” energy sources for decades to come.

Lacing his speech with references to California’s electricity plight and the nation’s rising gasoline prices, the president warned of “a darker future . . . if we fail to act on this plan.”

Among the consequences, he predicted, would be “more--and more widespread--blackouts” and increased reliance on foreign oil supplies that could leave America vulnerable to geopolitical “blackmail.”

But the plan contains little to help California in the short run, analysts and state lawmakers said. It rejects price controls on electricity--as sought by Gov. Gray Davis--while leaning heavily on longer-term initiatives to boost energy supplies.

Those include expanding nuclear power, allocating $2 billion for research on “clean-coal” technologies and opening up more federal land to oil and gas exploration, including portions of Alaska’s Arctic National Wildlife Refuge.

It also contains some environmentally friendly measures, such as tax incentives for residential solar power and fuel-efficient hybrid vehicles.

Some members of Congress voiced support for the elements of the plan dealing with conservation, but the more controversial elements were given a lower chance of passage.

Environmentalists criticized those portions of the plan aimed at boosting supplies, attacking coal as dirty, nuclear power as unsafe and expanded drilling as environmentally risky.

Greenpeace activists went so far as to dump a pile of coal outside the vice president’s residence.

“It’s slick. It’s colorful. It really looks like the Exxon Mobil annual report,” said House Minority Leader Richard A. Gephardt (D-Mo.).

Sen. Dianne Feinstein (D-Calif.) said the report fails to address the state’s immediate needs. “This lengthy document will not provide one more kilowatt to California this summer, prevent one more minute of blackouts or keep one less dollar from being transferred from California into the hands of the Texas-based energy producers,” she said.

In Sacramento, Davis appealed to Bush to reconsider his opposition to price caps on wholesale electricity sold in California.

“We are literally in a war with energy companies who are price-gouging us; many of those companies are in Texas,” Davis said. “You didn’t create this problem. But you are the only one who can solve it. And with all due respect, Californians want to know whether you’re going to be on their side.”

GOP lawmakers promised to put energy legislation on a fast track, with a goal of completing action by early August.

Environmental groups focused their criticism on measures aimed at boosting energy supplies.

“Clearly, there are options that are quicker, cleaner, cheaper and safer than what the president’s proposing,” said Sierra Club Executive Director Carl Pope. “But Bush’s operating plan seems to follow this motto: If it’s environmentally destructive, just do it.”

“This plan is imbalanced,” said David M. Nemtzow, president of the Alliance to Save Energy, a Washington-based coalition of business, consumer, government and environmental advocates.

Bush attempted to confront head-on the chorus of criticism that his production-oriented agenda would harm the environment.

“The truth is, energy production and environmental protection are not competing priorities. They are dual aspects of a single purpose: to live well and wisely upon the Earth,” Bush told several thousand local civic leaders at St. Paul’s RiverCentre Convention Center.

Bush also articulated a new rationale for adopting his energy proposals, arguing that failure to act poses environmental risks too.

“Our environment will suffer as government officials struggle to prevent blackouts in the only way possible: by calling on more polluting emergency backup generators and by running less-efficient old power plants too long and too hard,” the president said.

Citing rising gasoline prices and rolling electrical blackouts in California, Bush lamented: “These events are challenging what had become a fact of life in America--the routine, everyday expectation that when you flick on a light switch, the light will come on. Californians are learning, regrettably, that sometimes when you flick on the light switch, the light does not come on--at any price.”

Bush, who is expected to make his first visit as president to California at the end of the month, added that he is “deeply concerned” about California’s energy problems.

Seeking to make the case for oil exploration in the Arctic refuge, one of the plan’s most controversial provisions, Bush asserted that the region could produce 600,000 barrels of oil a day for the next 47 years--”exactly the amount we import from Saddam Hussein’s Iraq.”

Interior Secretary Gale A. Norton, who has been a lightning rod for environmentalists’ criticism, will play a key role in determining what federal lands could be opened for drilling.

Bush stressed the need to modernize the nation’s electricity delivery network, citing California’s experience as evidence.

“We have chopped our country into dozens of local electricity markets, which are haphazardly connected to one another. For example, a weak link in California’s grid makes it difficult to transfer power from the southern part of the state to the north, where blackouts have been worse . . . . It’s time to match our interstate highway and phone systems with an interstate electrical grid.”

The administration’s plan calls for connecting the electric transmission grids of states and regions into the first truly national system. So far, interconnection has occurred in a haphazard fashion, with bottlenecks that restrict power transfers from region to region and state to state, and sometimes even within a state, as occurs with California’s notorious Path 15, a series of high-voltage lines that move power between Southern and Northern California.

The national grid would be overseen by a private, self-policing organization akin to the National Assn. of Securities Dealers and other independent standard-setting groups.

Karen Hughes, counselor to the president, dismissed the growing criticism from environmentalists.

“We see this plan as an environmental plan--one that’s good for the environment,” Hughes said.

She said the agenda offers “a way to replace existing facilities and pipelines with cleaner, more efficient and safer ones. . . . It’s very good for the environment.”

To show his interest in innovative strategies, Bush, upon arrival in St. Paul, went straight to an energy generation plant that can burn any of several fuels--natural gas, oil, coal or wood--depending on which is cheapest at the moment.

R. Skip Horvath, president of the Natural Gas Supply Assn., expressed concern that the debate over national energy policy could resemble the simplistic story line of a “Spaghetti Western” movie.

“It’s not the good guys versus the bad guys,” Horvath said. “Real problems exist that are not easy to solve. . . .”

While GOP congressional leaders promised to move quickly on energy legislation, Marshall Wittmann, a conservative political analyst at the Hudson Institute, expressed doubt about their ability to secure passage of key provisions.

“The fact of the matter is that Congress is not going to act on any long-term difficult proposals,” Wittmann said. “The likelihood is that they will move on Band-Aid solutions.”

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America’s Energy Situation

Though the West has been hard hit by the energy crisis, it uses far less power than other regions of the country. Meanwhile, the nation’s consumption of power is rising. A look at the nation’s demand for energy:

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The Proposed Solution

President Bush’s energy policy task force developed 105 suggestions, including the following:

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Power Grid

* Order the Energy Department to prepare by Dec. 31 an analysis of transmission bottlenecks and how they can be fixed.

* Grant the federal government “eminent domain” authority to obtain right-of-way for transmission lines.

* Order the Federal Energy Regulatory Commission to improve the reliability of interstate power lines and to propose legislation providing for enforcement by a self-regulatory organization.

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Power Plants

* Direct federal agencies to streamline the regulatory review process to allow faster approval and construction of power-generating plants, transmission lines and pipelines to carry natural gas or oil.

* Order the Environmental Protection Agency to launch a 90-day review of whether regulations requiring state-of-the-art anti-pollution gear on upgraded power plants and refineries limit supplies.

* Direct the Energy Department to prepare a comprehensive electricity deregulation bill to promote competition and enhance reliability.

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Oil and Gas

* Order the Transportation Department to review fuel economy standards for vehicles to see whether they can be tightened “without negatively impacting the U.S. automotive industry.”

* Open a portion of the Arctic National Wildlife Refuge in Alaska to oil and gas explo-ration, a proposal that faces formidable oppo-sition in the Senate.

* Order the Environmental Protection Agency to review a patch-work of regional gasoline formula standards to assess whether they contribute to regional shortages of gasoline.

* Open oil and gas drilling in areas not currently leased within the northeastern portion of the National Petroleum Reserve in Alaska.

* Order the Interior Department to consider “economic incentives for environmentally sound” offshore drilling, such as royalty reductions.

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Nuclear Power

Provide $1.5 billion in tax incentives to facilitate the sale of nuclear plants.

* Streamline nuclear plant licensing procedures and ask Congress to renew the Price-Anderson Act, which shields nuclear power plants from catastrophic liability costs.

* Reexamine nuclear fuel reprocessing technology, abandoned two decades ago, as a possible way to recycle nuclear waste.

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Coal

* Invest $2 billion in clean coal technologies over the next decade, and extend an existing research and development tax credit.

* Provide “greater regulatory certainty” to coal plants.

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Conservation

* Provide homeowners with a $2,000 tax credit to install solar electricity or hot water systems.

* Provide $4 billion in tax credits for purchases of “hybrid” electric-gasoline vehicles or cars powered by fuel cells.

* Increase annual funding by $300 million to $1.7 billion for a federal program that helps poor families pay their household energy bills.

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Sources: Reuters, Bloomberg News Service, Dept. of Energy, National Energy Policy, Times staff Researched by JULIE SHEER / Los Angeles Times

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The Bush Plan Would...

* Streamline rules on power plant and refinery expansions

* Re-examine the federal moratorium on offshore oil leases

* Attempt to end bottlenecks in electricity transmission

* Build more pipelines to carry oil and natural gas

* Spur construction of new nuclear plants

* Open Arctic National Wildlife Refuge, possibly other federal lands, to oil and gas drilling

* Offer tax credits for the purchase of fuel-efficient hybrid vehicles

* Give a 15% tax credit for installing solar panels on houses

Chen reported from St. Paul and Nevada, Iowa, and Simon from Washington. Times staff writers Dan Morain in Sacramento and Elizabeth Shogren, Greg Miller and Ricardo Alonso-Zaldivar in Washington contributed to this story.

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The complete text of the Bush energy plan is available on The Times’ Web site at https://www.latimes.com/energy

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MORE INSIDE

A Closer Look: The nation’s demand for energy. A10

California’s Take: Little relief is seen for the state’s crisis. A11

Analysis: The modest plan relies heavily on private capital. A12

Congress: Some key provisions face a tough road. A19

Opting Out: Cities with their own power don’t want blackouts. B8

Power Firms: Judge won’t release providers from contracts. B8

Energy Stocks: Wall Street shows caution over energy sector. C1

Bond Outlook: California details plans for electricity bond issue. C1