WASHINGTON — Under pressure over high
energy prices, President Bush Wednesday will propose tackling the root causes of
the problem by encouraging new oil refineries be built at closed military bases
and jumpstarting construction of new nuclear power plants.
In a speech, Bush will also propose giving federal regulators the lead authority
to decide where to locate terminals for processing imported natural gas. States
have increasingly been taking the lead on this issue.
And the president will propose adding vehicles that use clean-burning diesel
fuel to the list of automobiles eligible for $2.5 billion in tax credits over 10
years to encourage further use of this technology. Other eligible vehicles are
hybrids powered by gasoline and electricity and fuel-cell vehicles.
Senior Bush administration officials unveiled details of the president's
proposals on Tuesday night. It will be his second energy speech in a week.
A Washington Post-ABC News poll showed that less than half of Americans support
the way the president is handling energy policy. Bush met Saudi Crown Prince
Abdullah at his Texas ranch on Monday but reached no agreement that would lower
gasoline prices in the near term.
Energy legislation is moving on Capitol Hill. The House has passed a version,
while the Senate will begin debate next month. Administration officials want to
work with congressional leaders to include Bush's proposals.
Speaking to small business leaders on Wednesday, Bush will call on federal
agencies to encourage construction of new oil refineries at the sites of former
military bases closed in recent years.
The agencies would work with states, local communities and potential investors
to encourage the use of the sites, the administration officials said.
The lack of adequate refining capacity is frequently cited by experts as one
reason why gasoline prices have surged dramatically in recent years. No new
refineries have been built in recent years even though the demand for gasoline
has risen.
On nuclear, Bush will propose offering companies risk insurance to mitigate the
cost of delays due to any potential failures in the licensing process. The last
generation of nuclear power plants was built in the 1970s and 1980s.
"There is a new and better licensing process. However, there is substantial
uncertainty with potential investors about the ability to move through the new
licensing process," one senior offcial said.
Liquified natural gas terminals take compressed, supercold natural gas shipped
from overseas and warm it into usable energy. Only four such terminals exist in
the United States amid increasing demand for natural gas.
Bush will propose the Federal Energy Regulatory Commission become the lead
authority in granting licenses, overruling what has increasingly become state
jurisdiction.
A senior official said there are 32 proposals to build new terminals, and Bush's
proposal would "provide some regulatory certainty" in order to get
them built. Rules on the terminals vary from state to state, and California, for
example, has not wanted to cede state authority.
Source: Reuters