Culminating a three-month, behind-closed-doors effort, the Bush administration’s energy task force today will issue its much-anticipated report in which it will map out a long-term strategy to bolster the nation’s sagging energy infrastructure, promote conservation and efficiency efforts, accelerate siting of transmission and open more public lands to producers to head off a worsening “storm cloud on the horizon.” The report will set the “tone” for the entire federal government on energy policy, telling it this is “the” issue on which attention should be focused.

“I think we got a good product here,” although there’s bound to be a lot of “controversy,” said Vice President Dick Cheney, head of the task force, during an invitation-only press briefing at the Old Executive Office Building earlier this week with NGI and other energy trade publications. If these were easy issues, “then our predecessors would have tackled them.” Cheney gave the briefing on the condition that his comments were to be embargoed until today.

He stressed that the report’s focus is on long-term solutions to the energy problems gripping the nation. “[We are] reminding people that short-term, so-called solutions that are really geared to insulate politicians…don’t get us anywhere,” and are “usually bad policy.” Cheney said the short-term energy fixes enacted under the Clinton administration, such as instantaneous releases from the Strategic Petroleum Reserve, were a “joke.”

Although the report addresses long-term solutions, the White House is counting on it having a psychological impact on U.S. energy markets over the next couple of weeks, possibly moderating prices in the short-term, said spokesman Ari Fleisher during a White House press briefing Wednesday. President Bush is “confident” that government assurances of increased energy supplies and enhanced conservation efforts will have a “ripple effect that benefits consumers, benefits the economy and helps to lower prices,” he noted.

Fleisher indicated it even may provide immediate price relief to California. “California, which faces blackouts, is going to be benefitted from the fact that the federal government is going [to] do its part to conserve energy. By conserving energy, it has an immediate short-term effect that can help lower prices and can avert blackouts.”

Responding to environmentalists and other critics, Cheney said, “We’ve tried to pay a lot of attention to increased efficiencies and conservation in the report.” However, “we also make the point that that’s not enough. As important as conservation is, it doesn’t close the gap” between supply and demand. Cheney, a former Halliburton executive, favors aggressive development of new energy supplies and upgrades to the existing infrastructure as well. He said the report strikes a balance between demand-reduction and supply-building measures.

The actual task force report is expected to be released by the White House today after President Bush unveils his national energy plan in a mid-day speech in St. Paul, MN. His speech will be based on the report, which will make a number of recommendations to Congress and will call for executive and agency actions to solve the nation’s chronic energy problems.

The report will include a total of 105 specific recommendations: 42 addressing conservation, environmental protection and alternative fuel development; 35 will seek to create more supply and modernize the U.S. energy infrastructure; and 25 will deal with international initiatives to boost energy resources.

The significant part of the report will be its “tone,” said Andrew Lundquist, executive director of the energy task force, which is formally known as the National Energy Policy Development Group. “Even though there are many, many recommendations [in the report], it’s setting a tone, telling everybody in government this is the issue that you’re going to have to pay attention to.”

The report places a “big emphasis” on improving the nation’s aging, inadequate energy infrastructure — building more natural gas pipelines, power transmission lines, electric generation plants, nuclear facilities and refineries, he noted. “…In some ways it’s been neglected and it just hasn’t kept up with the changing market.” Without these much-needed infrastructure enhancements, the nation will face “spiking prices” for natural gas, electricity, gasoline and heating oil “every year,” he warned.

Toward this aim, the task force calls for federal and state agencies to engage in coordinated permitting of new energy facilities. “There’s an emphasis alone on FERC…issues, and how we should be coordinating on permits both within the federal government” and at the state level, Lundquist said. “It’s not a rollback on any environmental laws or regulations, but it is an effort to have a rational approach to permitting.”

In addition, it is expected to urge Congress to amend existing federal law to grant the Federal Energy Regulatory Commission eminent domain authority over the siting of electric transmission facilities, similar to the siting authority FERC has over natural gas pipeline projects. Currently, utility companies must obtain siting approval from the various states and/or localities through which their transmission lines would traverse. Proponents say awarding eminent domain authority to one agency — FERC — would speed up construction of new transmission facilities significantly. This authority gives companies the right to seize private property for their transmission projects in return for compensating landowners.

The report also will call on the nation to begin the task of constructing 1,300 to 1,900 power generation facilities over the next two decades.

Furthermore, there are some “very strong recommendations in the nuclear area,” Lundquist said, without going into specifics. The report stresses the need to increase refining capacity as well, he noted, adding that it’s been a “couple of decades” since a new refinery was built in the United States.

Of special interest to producers, it drives home the need for greater land access for oil and gas exploration and production in the Lower 48 states, and calls for Congress to lift the restriction on drilling in the coastal plain region of the Arctic National Wildlife Refuge (ANWR). “Alaska is a state that has a lot of energy to offer — natural gas, oil. So you can expect there’s going to be recommendations.” He also hinted that the task force might make a recommendation addressing a long-haul gas pipeline from Alaska to the Lower 48.

The recommendation targeting ANWR is expected to be met with stiff opposition in Congress from Democrats and from Republicans representing New England states.

With respect to FERC, Lundquist said there wasn’t any consideration given to making structural changes at the Commission, given its status as an independent agency. “FERC is an independent agency so you can’t…direct FERC what to do. But you can [and we do] recommend things to FERC. You can encourage them” to move in a certain direction, he told NGI and other energy publications.

Conservation and energy efficiency are an “important issue” in the report, despite published news accounts to the contrary, Lundquist said. “I think that you will be surprised at the balance…in conservation, renewables, energy efficiency and [the] environment.” Also, the report recognizes the “advances that we’ve had in technology that have helped out the environment, clean air and clean water.”

Lundquist indicated that the conservation and energy efficiency issues were the toughest nut for the task force to crack. All eight Cabinet members on the task force agreed that this was needed, he said, but they disagreed over “how you do it.” In the end, they settled on tax credits to spur greater consumer and business interest in conservation, energy efficiency and renewable fuels, he noted.

He stressed that the report is fuel neutral. “It’s not a report where we pick and choose what the fuel of choice is for the future. We don’t say that natural gas is going to be the fuel of the future” versus other energy. Instead, the task force looked at each fuel, and made recommendations on each, Lundquist said.

“Frankly, we need supply from all of the sectors” from the cleanest to the dirtiest fuels. “We don’t neglect the fact that coal [accounts for] 52% of electricity generation,” he said, adding that the report addresses the need for more clean-coal technology.

Lundquist noted that no budget recommendations will be attached to the policy report. However, Energy Secretary Spencer Abraham has signaled that he will make recommendations addressing the cuts in the Department of Energy’s research and development budget for fiscal year 2002 once the report is released.

The report’s recommendations, according to Lundquist, were the result of some “very frank discussions” about energy issues by the nation’s top policy leaders and industry executives over the course of eight meetings. “They made some difficult decisions because we’re in difficult times. We believe what has led to these problems is there hasn’t been a long-term focus on energy” by the federal government for quite some time.

Cheney said Secretary Abraham will play a “major role” in shepherding the task force’s recommendations through Congress, in conjunction with other Cabinet members of the task force — such as Administrator Christie Whitman of the Environmental Protection Agency, Transportation Secretary Norman Mineta and Interior Secretary Gale Norton. “We don’t want the report to just go out there and gather dust,” he told reporters.

“There are some things in here [the report] that we’re going to work with Congress on,” but “we don’t have a [legislative] package to submit at this point.” The task force may propose amendments to energy legislation that already is pending in Congress, he said.

The energy task force will remain intact until the Bush administration can get a “pretty good handle on the actual follow-through and implementation of [the] recommendations,” Cheney said, rejecting the notion that it would stay in operation indefinitely. “I’m not a big believer in permanent task forces.”

Cheney dismissed attacks on the task force for the secrecy of its proceedings. “The actual process was handled in a way [that] most of our Cabinet meetings operate.”

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