Bush Plan to Tackle Energy Costs’ ‘Root Causes,’ Officials Say

Times Staff Writer

President Bush will propose measures to address the “root causes” of high energy prices, including possible construction of oil refineries on closed military bases and a tax break for “clean diesel” vehicles, administration officials said Tuesday.

The initiatives will be outlined in an energy policy address Bush is to make today at a Small Business Administration conference in Washington, according to three senior officials who briefed reporters on condition of anonymity.

They go beyond proposals already contained in the White House’s comprehensive energy plan and in legislation before Congress, the officials said. Even so, they are considered unlikely to provide short-term relief from high prices.

“The problems we are facing today and the ones we seek to address have been a long time in the making,” one official said. “The benefits of these policies would be some time in the development.”


Amy Myers Jaffe, senior energy analyst at Rice University’s James A. Baker III Institute for Public Policy in Houston, said Bush’s proposals might have a beneficial effect over time but did not appear to go far enough.

“They’re not getting at the core problem, which is that we need to do something in this country to truly reduce our consumption of energy,” she said. “Rather than getting a tax incentive to buy a diesel car, I’d rather see a tax penalty for choosing to buy a gas guzzler.”

The five initiatives to be outlined by Bush would:

* Call on federal agencies to work with states and communities to encourage construction of oil refineries on closed military bases. No specific sites have been identified, officials said.


* Expand an existing White House proposal to provide a $2.5-billion tax credit for purchases of hybrid and fuel-cell vehicles by including cars and trucks that burn “clean diesel” fuel, which is more efficient than gasoline.

* Encourage construction of nuclear power plants by reducing uncertainty in the licensing process and providing federal risk insurance to mitigate the cost of unforeseen delays. No new nuclear plants have been commissioned since 1973.

* Increase federal authority over the location of onshore liquefied natural gas terminals. Four LNG terminals are now operating. Energy companies have proposed building 32 more if government approval can be obtained.

* Press other countries to participate in international efforts to promote more efficient and less polluting energy use, including clean coal and nuclear power generation.


The officials said it was not yet clear whether any closed bases would be good sites for new refineries. But a shortage of domestic refining capacity is contributing to gasoline price increases, and industry efforts to expand existing refineries have proved insufficient, they said.

The LNG proposal would “clarify” the authority of the Federal Energy Regulatory Commission to approve the placement of onshore terminals that accept tanker shipments of highly compressed gas and convert it to conventional natural gas for distribution to domestic markets, the officials said.

Bush’s speech will stress the use of new technology to help secure domestic and global energy supplies, the officials said. Some proposals are already included in a comprehensive energy bill approved by the House last week; others are not. The Senate has not voted on energy legislation this year and is considered somewhat less receptive to the president’s plans.

Times staff writer Richard Simon contributed to this report.