Technology Is Key to Bush’s Long-Term Energy Plan

Times Staff Writers

President Bush, under pressure to do something about high energy prices, called Wednesday for new efforts to harness the “transformational power of technology” to wean the United States from its dependence on oil and gas.

In his second major energy policy address in a week, Bush proposed several initiatives he said would help address long-term problems contributing to price increases and constraining energy production.

They include government-provided risk insurance for new nuclear power plants, expanded federal authority to approve liquefied natural gas terminals, possible construction of oil refineries on closed military bases and a new tax break for people who buy diesel-powered cars.


But for the most part, the president expressed a bedrock belief in the ability of the private sector to expand energy supplies and promote conservation, with modest government involvement to start.

“In the years ahead, technology will allow us to create entirely new sources of energy in ways earlier generations could never dream,” Bush said. “Technology ... is this nation’s ticket to greater energy independence.”

Bush’s remarks appear to reflect a delicate balancing act on the part of the White House, analysts said. As an accomplished politician, they said, Bush knows he must ratchet up his rhetoric to convince Americans that he too feels the sting of high prices. But as a former oilman and business executive, they said, he was hesitant to embrace solutions that involved extensive federal intervention in the energy sector.

“He’s trying to convey to the public a sense that he’s on the job, that he’s concerned about high prices ... and that he’s trying to find a way to get more energy to the country as quickly as possible,” said Stuart Rothenberg, an independent political analyst in Washington.

“It’s a tough place to be if you’re a politician,” said Kim Wallace, chief political analyst for Lehman Brothers. “It’s probably tougher for this president because he’s a market-oriented president and an energy-oriented president. The sensitivities are a little bit higher.”

Speaking at a Washington conference sponsored by the Small Business Administration, Bush cited a long list of administration proposals contained in the comprehensive energy strategy drafted by Vice President Dick Cheney in 2001.

He criticized Congress for not enacting his plan and urged the Senate to begin work soon on its version of energy legislation passed by the House last week. The House measure contains many of the administration’s initiatives.

Bush acknowledged that none of his proposals, including the measures he outlined Wednesday, would have much immediate effect on prices at the gas pump. But he said they would help lead the way toward a more diversified energy supply and reduced U.S. reliance on foreign crude oil.

As an example, Bush cited the administration’s efforts to promote development of hydrogen as a fuel source for cars and trucks. Pointing to two young people in the audience, he said he wanted them “to be able to take your driver’s test in a completely pollution-free car that will make us less dependent on foreign sources of energy.”

Bush said he wanted “to reduce uncertainty in the nuclear plant licensing process, and also provide federal risk insurance that will protect those building the first four new nuclear plants against delays that are beyond their control.”

After pointing out that no new oil refineries have been built in the United States since 1976, Bush said he would “direct federal agencies to work with states to encourage the building of new refineries -- on closed military facilities, for example -- and to simplify the permitting process for such construction.”

Energy analysts said most of the president’s new proposals appeared to be modest expansions of previous administration initiatives and did not represent a significant expansion of the government’s role in energy production or consumption.

They said Bush’s efforts to spur construction of new oil refineries and nuclear power plants might prove beneficial, but predicted that the pace of future development would be dictated more by economic fundamentals than by regulatory changes.

“At the end of the day, there’s very little that policy can do for the short term,” said David Pursell, a principal at Pickering Energy Partners, a Houston research firm.

Still, the bully pulpit crusade might yield bigger results than a raft of new proposals if it generates public pressure for passage of Bush’s energy bill, which contains tax breaks and other incentives to increase production and promote conservation. One controversial provision would open Alaska’s Arctic National Wildlife Refuge to oil drilling.

Christine Tezak, an energy specialist at the Stanford Washington Research Group, said Bush was criticized in previous sessions of Congress for not pushing hard enough for passage of energy legislation.

“He’s trying to gin up public demand” for action, she said. “That certainly is something new and different and perhaps more important than the substance of anything new he’s proposing.”

Bush’s address came two days after a meeting at his Texas ranch with Crown Prince Abdullah of Saudi Arabia that raised questions about his willingness to take steps to bring down oil and gas prices.

In that meeting, Bush neither sought nor received a new commitment from the Saudis to increase oil production. Afterward, Secretary of State Condoleezza Rice and national security advisor Stephen J. Hadley told reporters that Bush was taking a longer view, with an eye on changing the fundamentals of the market.

Earlier Wednesday, White House spokesman Scott McClellan rejected suggestions that Bush’s initiatives were quickly drafted in an attempt to portray the president as responding to new expressions of public concern about energy.

McClellan characterized Bush’s proposals as part of the president’s “ongoing consultations” with staff. He said Bush had asked aides in recent weeks about additional measures that might be taken.

Bush’s level of concern about the soaring prices is very high, McClellan said. “It’s affecting the pocketbooks of everyday Americans,” he said. “It’s affecting people out there in the country who are trying to make ends meet. It’s affecting small business.”

Bush’s proposals drew sharp rebuttals from congressional Democrats, who want the government to take more aggressive action to reduce U.S. energy consumption and rein in prices.

Senate Minority Leader Harry Reid (D-Nev.) said Bush’s speech “amounts to little more than half-measures and wrongheaded policies that will do nothing to address the current energy crisis or break the stranglehold that foreign oil has on our nation.”