Task force calls on US to produce 25% of fuels from renewables

Task force calls on US to produce 25% of fuels from renewables

Washington (Platts)--26Jul2006

An energy security task force comprised largely of Democrats and former
officials in the Clinton Administration released a report Wednesday calling on
the US to produce 25% of the liquid fuel it consumes from renewable sources by
2025.

"To achieve this goal, both the federal government and industry must
boost investments in biofuels, particularly in the research and development of
cellulosic fuel," the report said.

An aggressive strategy to replace oil and gas with renewable fuels
"cannot rely solely on corn-based ethanol," the report said.

"The Bush administration has demonstrated a willingness to acknowledge
the existence of energy security challenges, but it has failed to implement a
plan to meet them," the report said.

The report also recommended the establishment of a counter-cyclical tax
on liquid fuels for cars, trucks and airplanes "that is triggered only when
the price of oil falls low," with all revenues dedicated to alternative energy
research and development and energy assistance to low income people.

Other measures recommended include raising fuel economy standards for all
vehicle classes; promoting the development of a global LNG market; investing
in a more diverse and resilient domestic natural gas infrastructure, including
new pipelines; and weakening the influence of the Middle East and OPEC over
oil and gas supply "by promoting responsible investment in alternative regions
and transit routes."

The report specifically cited the Caspian Sea region and the potential
for exploration and production off the west coast of Africa.

THREAT OF CLIMATE CHANGE

The report called on the US to "confront the threat posed by climate
change," and advocated such measures as a national greenhouse gas emissions
cap-and-trade system, including for all new coal plants built in the US;
completion of carbon dioxide capture and sequestration demonstration projects;
and assisting developing countries in their efforts to build efficient and
environmentally sustainable domestic energy infrastructures.

The report also recommended that the International Energy Agency
establish a formal partnership with China and India, which would enhance the
agency's planning and information sharing program and expedite the development
of strategic petroleum reserves in the two countries.

It also proposed the establishment of new rules and regulations for
international energy transactions and acquisitions. Citing the China National
Offshore Oil Company's failed effort to acquire Unocal, the report said the US
"must be careful in the future not to increase China's mistrust of the global
energy market--a mistrust that drives China's aggressive pursuit of long-term
govern-to-government energy deals."

"The Bush administration has demonstrated a willingness to acknowledge
the existence of such energy security challenges, but it has failed to
implement a plan to meet them," the report said.

Members of the task force, established by the Center for American
Progress, include former Secretary of State Madeleine Albright; former
Environmental Protection Agency Administrator Carol Browner; senior Clinton
administration officials advisors Samuel Berger and John Podesta; and former
Senate Democratic Leader Tom Daschle, South Dakota.

--Gerald Karey, gerry_karey@platts.com

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