Daily GPI / NGI All News Access

Bush Calls for Hike in Domestic Production as Nation Diversifies Supply

In his first State of the Union address to a Democrat-controlled Congress, President Bush Tuesday called for increased domestic oil and natural gas production as the nation accelerates the diversification of its fuel supply to include greater amounts of renewable and alternative energy sources.

"As we continue to diversify our fuel supply, we must step up domestic oil [and gas] production in environmentally sensitive ways," the president said in his seventh State of the Union message to Congress. This was the only reference to traditional energy sources in the hour-long address. The bulk of the energy-related content focused on increased production of green energy to lessen the nation's dependence on foreign energy sources.

Critics attacked the president's energy proposals made in the speech, saying they consisted primarily of recycled rhetoric from past proposals that were never realized. They also said the president missed a real opportunity to address more fully key issues, such as global warming, nuclear energy and domestic gas production..

Jack N. Gerard, president of the American Chemistry Council, said the president's speech fell short on natural gas. "We applaud President Bush's call for greater energy efficiency and diversity," but "we are mindful that without adequate domestic natural gas supplies, these goals will be impossible to achieve. We encourage Congress to address domestic natural gas supply as an essential element in the policy equation."

He noted that "enormous amounts of natural gas will be needed to generate lower carbon electricity, grow renewable energy crops, act as a feedstock for energy-efficient materials and move the nation toward energy independence." The bill signed into law last month by Bush to open up 8.3 million acres in the Central Gulf of Mexico to oil and gas deveopment was an "important step, but domestic natural gas supplies remain woefully inadequate to meet today's demand, let alone tomorrow's," Gerard said.

"Our best defense against foreign oil dependency is the vast oil and natural gas resources we have here in America," said Mike Linn, chairman of the Independent Petroleum Association of America, which represents more than 5,000 independent oil and gas producers. The United States must embrace conservation, efficiency and all forms of U.S. energy for the future, but "the fact remains that for the foreseeable future, oil and natural gas will be our main fuel source."

Bush this year called on Congress to reduce gasoline usage in the United States by 20% over the next decade. The 20% would be below projected annual gasoline usage, not below current consumption levels, the Washington Post reported.

To achieve this goal, he urged lawmakers to establish a mandatory fuels standard that would require the production of 35 billion gallons of renewable and alternative fuels by 2017. "That is nearly five times the current target."

"At the same time, we need to reform and modernize fuel economy standards for cars the way we did for light trucks," which would help to conserve an additional 8.5 billion more gallons of gasoline by 2017, Bush said.

Bush's goal of reducing gasoline consumption is "laudable," but rather than using "lofty goals and vague rhetoric, the president could have announced a simple, common sense initiative to reduce our dependence on foreign oil," said Rep. Steve Israel (D-NY), a member of the House Appropriations Subcommittee on Energy and Water. "He could do this by ordering the federal government to swap out 50,000 gas guzzlers from the federal fleet and buy 50,000 plug-in hybrids. Mandates and formulas won't incentivize Detroit, purchase orders will," he noted.

Bush, in an executive order issued Wednesday, moved in that direction. He ordered all federal agencies with fleets of at least 20 motor vehicles to wean themselves from their consumption of petroleum products in favor of more nonpetroleum-based products. Bush also called on the agencies to use plug-in hybrid vehicles when commercially available at resonably comparable prices (see related story).

"It's in our vital interests to diversify America's energy supply. The way forward is through technology," Bush said. "We must continue changing the way America generates electric power by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power. We need to press on with battery research for plug-in and hybrid vehicles, and expand the use of clean diesel vehicles and biodiesel fuels. We must continue investing in new methods of producing ethanol, using everything from wood chips to grasses to agricultural waste," he noted.

"Achieving these ambitious goals will dramatically reduce our dependence on foreign oil, but it's not going to eliminate it" altogether, he said, adding that domestic oil and gas would continue to play a critical role in the nation's energy portfolio.

Bush touched only briefly on the issue of climate change, noting that technological breakthroughs and greater production of green fuels "will help us to confront the serious challenge of global climate change." A number of bills have been introduced in Congress that would set a mandatory cap on greenhouse gas emissions, but the Bush administration is opposed to mandatory limits.

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, said he was disappointed that the president's remarks on global warming were limited. "There is a great desire across the country -- including from leading American companies -- for presidential leadership on this important issue. By essentially ducking the issue of taking a mandatory, economywide approach to the problem, the president has missed a real opportunity."

Sen. Pete Domenici of New Mexico, the ranking Republican on the Senate energy panel, also had problems with the speech. "I am very disappointed. The president gave little attention to the tremendous promise nuclear power holds for this nation," he said. "I have been troubled by the administration's tepid commitment in recent months to loan guarantees that provide the support needed to deploy new nuclear power plants as well as biomass, solar and clean coal projects. All of these energy sources can help us address climate change."

John Engler, president of the National Association of Manufacturers, supported Bush's energy proposals. "Sky-high energy costs are a major impediment to our ability to compete in the global marketplace. We need to increase access to domestic energy sources, especially natural gas, even as we accelerate research and development of alternative fuels and expansion of nuclear power options."

©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus