Kerry energy plan endorses renewables, coal and more US gas

Washington (Platts)--6Aug2004

Democratic Presidential nominee John Kerry Friday released a broad energy plan
that would require the US to generate 20% of its electricity from renewable
resources by 2020, invest $10-bil over the next 10 years to speed the
deployment of new coal-fired generating technologies and encourage more gas
development in the western and central US Gulf of Mexico. The plan, unveiled
by the Massachusetts senator during his campaign swing through Missouri,
blasts the Bush administration for doing little to stop the rapid rise in
energy prices and blames their foreign policy for adding an $8-15/bbl premium
to world oil prices. Kerry said the plan is designed to reduce the US'
"increasingly dangerous dependence on foreign oil," largely from the unstable
Middle East. Key elements of the proposal include establishing an "Energy
Security and Conservation Trust Fund" that would be capitalized with $20-bil
from existing federal offshore oil-and-gas royalties and provide a permanent
funding steam to develop new clean fuels and energy technologies.

Kerry said he would use money from the fund to improve automobile efficiency
by providing incentives of up to $5,000 for consumers who buy clean and
efficiency vehicles and provide incentives to encourage the auto industry to
retool their plants to build more efficient, advanced technology automobiles.
In addition, money from the fund would be used to create a "Clean Fuels
Partnership" that Kerry said would bring together government, agriculture and
industry to develop a plan for allowing the US to met 20% of its motor fuel
demand by 2020 with "domestically produced alternative transportation fuels."
The plan also would call on the Federal Trade Commission to "be more cautious"
about approving energy sector mergers, saying the Bush administration has
approved 33 "takeovers" in the oil-and-gas industry, totaling $19.5-bil.
During this period of increased concentration in the refining industry, the
plan said gasoline prices have risen "to record levels and refiners have
enjoyed their highest profit margins since 1990."

On natural gas, the plan endorses developing more sources in places like the
western and central US Gulf of Mexico "in areas already available for leasing
and drilling--including ultra-deep waters," building infrastructure to move
more gas to the Lower-48 states from Canada and Alaska, and promoting the
"safe and efficient development" of liquefied natural gas. In addition, the
plan calls for making coal an "integral part" of the energy solution and would
invest $10-bil over the next decade to "help transition from the fleet of
older coal plants to cleaner and more advanced coal-fueled power plants,"
including coal gasification. The plan calls for providing the private sector
with loan guarantees and tax credits to speed deployment of the new plants.
Further, Kerry's proposal would "establish a national goal" of producing 20%
of US electricity from renewable fuels by 2020.

The plan supports a renewable energy credit trading market and production tax
cedits. The plan, moreover, offers some support for nuclear power, saying the
technology can "play an essential role in providing affordable energy, while
reducing the risk of climate change." It adds, however, that "key challenges
such as nuclear waste disposal," nonproliferation and plant security must be
met. The plan reemphasizes Kerry's opposition to the proposed high-level
nuclear waste storage facility in Nevada. The plan takes the Bush
administration to task for failing to move on a plan by congressional
Democrats to move a stand-alone electric reliability bill and says a Kerry
administration would enact mandatory, enforceable reliability standards for
industry, employ "innovative technologies...to revolutionize our antiquated
system and develop a 'Smart Grid'," and deploy new technologies that "are
clean, efficient, reliable and less vulnerable to terrorism."

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