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Analysis: Bush Pushes Energy Legislation

AFP file photo of Bush discussing America's energy policy, April 5, 2005.

Washington (UPI) June 15, 2005
President George W. Bush likened overdependence on imported oil Wednesday to a growing tax on U.S. economic development and urged the Senate to take action sooner rather than later on passing his comprehensive energy proposals.

And in a language any elected official would not miss, he warned that failure to do so could result in public backlash.

"My advice is they ought to keep this in mind: Summer is here, temperatures are rising, and tempers will rise if Congress doesn't pass an energy bill," he said.

"The American people know that an energy bill will not change the price of gasoline immediately. But they're not going to tolerate inaction in Washington as they watch the underlying problems grow worse."

Bush made the comments in Washington at the 16th annual Energy Efficiency Forum. The unmistakable thread throughout his speech was that energy conservation and security were part and parcel of economic security, and economic security could not be separated from national security.

"In today's context, national security and energy security are so closely intertwined it is inconceivable we would consider them as separate issues," Robert Ebel testified before a House subcommittee in April.

Ebel is head of the Energy Program at the Center for Strategic and International Studies, a Washington based think tank.

The United States currently uses about 20 million barrels of crude oil each day to power its cars, its electrical appliances and for various industrial purposes. According to government statistics, about 58 percent of that supply is imported.

What's more, with fewer domestic oil refineries to meet increasing demand, one in nine gallons of gasoline consumed are imported as a refined-abroad product each day.

Government and oil industry figures indicate that in the first two months of 2005 alone, an average of 1.56 million barrels of oil a day were imported from Saudi Arabia, 1.52 million from Canada and 1.43 million barrels from Mexico.

Venezuela, Nigeria, Iraq, Ecuador, Angola, Russia, Algeria, Britain, Kuwait, Gabon, Chad and Colombia round out the list of the top 15 oil exporters to the United States.

In 1985, 75 percent of crude oil used in U.S. refineries came from domestic sources. In 1976, there were more than 300 U.S. refineries. Today the figure is 150 or less, according to john Felmy, chief economist at the American Petroleum Institute.

Ebel, in his testimony before Congress said "every energy decision we make as individual consumers, every energy-related decision taken by our government, has a tradeoff. These tradeoffs carry their own costs and risks."

The attitude of NIMBY (not in my backyard), which has blocked construction or expansion of energy-related facilities like refineries by residents who don't want the noise or the smell, has resulted in a shortage of energy infrastructure, and that shortage props up prices.

The same applies to a failure to boost domestic output because of concerns about the environmental impact of increased drilling.

Bush outlined four steps he believes must be taken to lessen American dependence on foreign oil.

First is to improve conservation and efficiency, he said, by developing hybrid vehicles, which use less fuel and which are better for the environment, and also encourage production and use of clean-diesel vehicles.

Second is to produce and refine more oil domestically, while finding and using alternative fuels - such as ethanol and biodiesel - makes up the third objective.

Finally, is dealing with a major reason for higher demand on crude oil stocks.

"Much of the current and projected rise in gasoline prices is due to rising oil consumption in Asia," Bush said. "These are emerging economies that are consuming more natural resources, one of which is oil.

"At the G8 meeting next month, I'll ask other world leaders to join America in helping developing countries find practical ways to use cleaner, more efficient energy technologies."

Bush's fiscal 2006 budget includes provisions for $2.5 billion in tax incentives over 10 years to consumers for buying hybrid vehicles. There are also extension of tax credits for those using clean diesel cars and trucks.

Bush is also calling for simplification of regulations governing refinery expansion and increasing the use of alternative fuels, including nuclear energy.

The Senate this week debates an energy bill the White House says is long overdue. But it does not include a provision for drilling in a small portion of Alaska, something vehemently opposed by environmentalists.

That provision is in the House bill which passed earlier this year, and which would have to be reconciled with any Senate legislation.

"Our dependence on foreign oil is like a foreign tax on the American dream," Bush said, "and that tax is growing every year. But people got to understand our dependence on foreign oil didn't develop overnight, and it's not going to be fixed overnight."

Noting his proposal for the kind of comprehensive energy policy to be found in the House bill was made early in his first term, Bush also said, "Now is the time to act. Now is the time to put a strategy - we should have done this 10 to 15 years ago. Now is the time to move."

Bush wants a bill on his desk by the beginning of August, when Congress is due to go into summer recess, but that may be difficult to achieve.

Another provision in the House bill likely to cause controversy in the Senate is a liability protection for the manufacturers of a gasoline additive called MTBE.

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