Reaction to Energy Plan (Predictably) Mixed

The reaction was loud, long and predictable --- and in fact most was probably written well in advance of yesterday's unveiling. While the energy industry --- from natural gas interests, to coal to nuclear power --- hailed the Bush energy plan for its long-overdue focus on developing the nation's energy resources and infrastructure, environmentalists bashed it as a bunch of dirty words aimed at derailing the movement to reduce pollution and preserve the environment.

With the opening salvos out of the way, both sides now will settle down to putting their muscle where their mouth is, directing their efforts to influencing public opinion, and congressional and agency actions to come up with the necessary compromises.

House Majority Whip Tom DeLay (R-TX) lost no time in issuing a congressional call to arms."The quicker we enact the components of this comprehensive plan, the sooner we can get relief to the American people. The Republicans in the House will act immediately to craft legislation....Next week, I will bring together all the relevant House committees to map out an action plan to ensure that we pass comprehensive energy legislation by the first week of August."

DeLay stressed conservation and improving energy efficiency, streamlining government regulations, diversifying energy sources, increasing domestic supply, and promoting technology and research. Democrats issued their own plan early last week, and are preparing to do battle in the Congress (see related story).

On the Senate side Chairman Frank Murkowski (R-AK) of the Committee on Energy and Natural Resources said he plans to merge the White House recommendations with his own bill during a markup in mid-June. A number of lawmakers acknowledged the hard work of compromise lies ahead. House Energy and Commerce Chairman Billy Tauzin (R-LA.) suggested one possibility is to pass portions of the White House conservation proposals first, to soften up the opposition to supply-side measures later. Some Republican legislators said the administration could have little hope for Murkowski's pet project of opening the Arctic National Wildlife Refuge to drilling, but included it because he has an important role as committee chairman.

Meanwhile, the rhetoric:

"The Administration should be congratulated for not giving in to the all-too-common idea that using energy is a sin, something to feel guilty about," Fred L. Smith, Jr., president of the Competitive Energy Institute, said. CEI also noted "the important move away from the disastrous anti-energy policies of the last decade."

The Small Business Survival Committee saw it as a move toward reliable, affordable energy. "The situation in California is becoming increasingly intolerable for many small businesses and the lessons should be clear for our nation's lawmakers --- supply matters."

Jerry Jordan, chairman of the Independent Petroleum Association of America, called it "a rational approach to energy planning," incorporating the total supply mix and conservation. He noted an important mechanical element in the task force recommendations, that of requiring an energy impact statement on all federal actions affecting energy be filed with the Office of Management and Budget. If implemented, this would effectively centralize the power in the White House to approve or derail any federal action touching on energy.

"We are pleased that impediments to access will be examined to encourage natural gas exploration and production." And touching on the inclusion of environment-friendly initiatives, Jordan said "the president is right not to accept the false choice between environmental protection and energy production. The producing industry is proud of its record of using advanced technologies to locate and produce oil and natural gas. It is wrong to suggest that energy production poses an unmanageable environmental risk. Domestic producers can provide adequate supplies at realistic prices and meet environmental requirements. They are doing it every day--in the Rockies, in Alaska, in Appalachia, and in our offshore coastal waters."

The Interstate Natural Gas Association of America applauded the focus on streamlining the pipeline certification process. It was particularly pleased with the proposal to coordinate federal, state and local agencies in the approval process. American Gas Association President Dave Parker said, "We're glad to see that the plan recognized that Americans possess the technology and the ingenuity to efficiently tap into our natural gas resources in a responsible and environmentally sound fashion. Bringing more natural gas into the marketplace will help keep it affordable and available for consumers."

"We are extremely pleased that the plan recommends that the Secretary of Energy work with FERC to develop the legislation needed to provide for a self-regulatory reliability organization in the United States subject to FERC oversight," says Michehl R. Gent, president of the North American Electric Reliability Council. NERC has been working during the last year-and-a-half to secure the enactment of such legislation in the U.S. Congress. "It is time to give a federal agency the authority to certificate interstate transmission lines, just as we do for interstate natural gas pipelines. Finding a way to make transmission an attractive investment so that companies will be willing to build transmission lines that will enhance the entire transmission system also is critical. That will pay huge dividends in being able to move electricity from where it is produced to where it is needed," Gent emphasized.

Conoco Chairman Archie W. Dunham praised the administration's "winning combination....Clearly, we need to increase domestic supplies of natural gas and crude oil, remove barriers to improving the nation's energy infrastructure and make logical use of abundant coal and renewable resources. Rethinking our attitudes toward nuclear power also makes sense. But increased supplies must be accompanied by sensible conservation efforts if we are to solve the problem long-term."

Robert J. Allison, Jr., Chairman of Anadarko Petroleum Corp., also supported the plan, saying "we're way behind the demand curve, and it's going to be hard to catch up; it's going to take time, and the long-term approach of the administration's plan is very appropriate. To encourage new production, we need the government to reverse administrative and legislative policies that have put hundreds of millions of acres of resource-rich public lands and waters off limits to drilling, and eliminate delays on areas that are open for leasing. We are not trying to take shortcuts on environmental protection. But the approval system has gotten out of hand," he added.

The Alliance for Competitive Electricity, which is comprised of 11 energy utility companies, congratulated the administration for the initiatives aimed at the nation's aging electric infrastructure and measures to help alleviate regional power shortages. The group cited the plan's call for eminent domain authority, incentives for investments in new transmission lines and FERC oversight of the interstate system reliability as key to upgrading the power system. The policy also "accurately identifies regions of the country that could suffer this summer from the lack of enough transmission capacity: California, Long Island, the Great Lakes, the Southeast and New England." The Alliance also called for repeal of the Public Utility Holding Company Act of 1935 (PUHCA) and section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA), which it said are impediments to competitive electricity markets.

Duke Energy heralded the "administration's welcome commitment to fuel diversity." Duke Energy Chairman Richard B. Priory said that "to support economic growth and stabilize energy prices, we need to use all available fuels, including our abundant domestic coal supplies, emissions-free nuclear energy and natural gas. In addition, we should encourage conservation as a fuel source as important as any other. American energy companies are supplying the bricks and mortar and turbines and pipes -- the government can help by removing federal barriers to wholesale competition, investing in new energy-efficiency technologies and reviewing the impact of regulatory policies on energy supply."

On the other side of the debate, the Bush plan places "a thin veil of energy efficiency over a cesspool of polluter giveaways," the Sierra Club said. "The Bush administration energy plan ignores high-tech, energy-efficient solutions in favor of increased oil, gas, coal, and nuclear production, while his budget proposal slashes funding for renewable energy and efficiency by a third."

"Everyone knows we must use energy more efficiently to cut energy bills and protect our environment. This plan is imbalanced (sic) --- it provides lip service to energy efficiency and saves all its heavy lifting for increasing energy supplies. Their primary response is to dig more, mine more and build more. They should also say, 'waste less,'" said the Alliance to Save Energy President David M. Nemtzow. "An energy policy that only hints at energy efficiency and overemphasizes supply will not answer our nation's energy problems. Energy efficiency is the quickest, cheapest, cleanest way to extend our nation's energy supplies."

In California, Gov. Gray Davis said in the long term the Bush energy plan is "probably on track," but it offers nothing for states like California that are "already in peril." Davis has his own formula. The governor said that when he met with power generators last week he told them "face to face" that if they don't help him get through this summer, he intends to "sign legislation creating a windfall profits tax and seizing power plants.

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