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		 Subject: Utilities, Electric: Deregulation: GEORGE W. BUSH CRITICIZES 
CLINTON-GORE'S ENERGY POLICY ...


 
GEORGE W. BUSH CRITICIZES CLINTON-GORE'S ENERGY POLICY IN ANNOUNCING HIS OWN 
? 
10/04/2000 
Foster Electric Report 
7 
(c) Copyright 2000, Foster Associates, Inc. 

While attacking the Clinton-Gore Administration's "nonexistent" national 
energy policy, Republican presidential candidate George W. Bush recently 
revealed his own policy.

"Despite presiding over a period of unprecedented economic growth and 
increasing energy demand, it is clear that the Clinton-Gore Administration 
has done little to plan for America's future energy needs," said a Bush 
position paper on energy issues. "At best, for the last seven-and-a-half 
years the Administration has had no energy policy. At worst, its policy has 
been to ignore America's increasing reliance on foreign oil, while 
discouraging domestic energy exploration and production. Moreover, the 
Administration's actions have been inherently contradictory: extolling the 
virtues of information technology, but failing to plan for the increased 
energy needs of the New Economy; promoting the development of electric 
vehicles, but discouraging investment in new electrical generating capacity." 

In particular, Bush criticized the Administration for allowing U.S. 
dependence on foreign oil to jump to a record 56 percent, compared with only 
36 percent during the 1973 oil crisis. As important as oil is, however, 
"increasingly, the most critical source of energy for the country is 
electricity, which is principally produced not by oil, but by natural gas, 
coal, nuclear energy, and hydroelectric power," asserted the Bush energy 
policy outline.

And while the Clinton-Gore Administration has been pushing Americans to 
increase their use of renewable energy resources, Bush believes that a 
national energy policy "must also be realistic about our current situation. . 
. . [and] must reflect the fact that, for the foreseeable future, 
hydrocarbons -- oil, coal, and especially clean-burning natural gas -- will 
continue to play a critical role in meeting the growing energy needs of the 
New Economy. Hydroelectric and nuclear power will also play an important 
role."

Bush also blasted the current Administration for discouraging investment in 
additional electrical generating capacity and transmission, leaving certain 
areas of the country vulnerable to regional brownouts and blackouts. In 
particular, the presidential hopeful noted that Internet-related activities 
now consume about 13 percent of U.S. electric output. Further, while in 1975 
roughly 25 percent of U.S. energy demand was delivered as electricity, Bush's 
energy outline said this figure has risen to almost 37 percent and will 
continue to rise "due to the growth of the New Economy."

"Intel estimates the number of Internet nodes will reach one billion sometime 
during the current decade," noted Bush. "New web sites translate into more 
users, more traffic, more servers, more peripherals, more air conditioning -- 
in short, more demand for electricity and for the fuels that are used to 
produce it."

And as demand keeps growing, the nation's generating fleet is getting older. 
By 2015, about 60 percent of the existing coal-fired plants and 40 percent of 
nuclear plants will be more than 40-years-old. At the same time, the nation's 
electric transmission grid desperately needs new investment as it bends under 
the strain of greater power flows created by competition in wholesale 
electricity markets. "Unfortunately, the Clinton-Gore Administration has 
failed to establish a framework to encourage this investment," Bush asserted.

Bush next noted the nation's dependence on coal to produce 50 percent of the 
nation's electricity supply. Yet, while the U.S. holds more than 25 percent 
of the world's coal reserves, which would be enough to produce power at 
current production rates for the next 250 years, Bush said the current 
Administration's policies and implementation of the Kyoto global climate 
treaty would reduce electricity derived from coal to less than 10 percent by 
2020.

"As a result, electricity prices would increase 50 percent in real terms and 
a massive investment in natural gas infrastructure would be required to 
replace the lost coal capacity," Bush continued. Further, substantial 
emission reductions "could be more readily achieved by scheduling emission 
reductions to coincide with technological advances, but the Administration is 
instead insisting upon substantial reductions before these advances can be 
reasonably deployed."

The Clinton-Gore Administration was also blasted by Bush for doing nothing 
about replacing the 40 percent of the nation's electricity needs currently 
being met by the nuclear capacity expected to be retired by 2020 and for the 
costly and time consuming current hydropower relicensing process, as well as 
for not taking a stand on Secretary of the Interior Bruce Babbitt's open 
advocacy of destroying dams.

Finally, Bush -- who passed an electric industry deregulation bill while 
governor of Texas -- complained that the Administration has not pushed hard 
enough for a federal electric industry deregulation bill. "Roughly half of 
the states, including Texas, have passed some form of electric restructuring 
legislation to deal with retail markets," Bush stated. "It has become 
increasingly clear, however, that federal legislation is needed to assure the 
reliability of the nation's electrical grid, and to promote consumer choice 
by removing federal barriers to competition. Unfortunately, the 
Administration has not offered the leadership necessary to pass a 
comprehensive electric restructuring bill, thus preventing consumers from 
receiving all of the benefits that deregulation can provide."

In contrast to the Administration, the position paper said Bush "recognizes 
the need for a comprehensive, strategic approach to ensuring U.S. energy 
security. He understands that the only way to meet America's growing energy 
needs is to utilize a range of fuels and technologies: oil, natural gas, 
coal, nuclear, hydroelectric, wind, and biomass, as well as increased 
conservation. He also understands the critical need to help low-income 
Americans with their energy bills."

Thus, if elected president, Bush pledged to work with Canada and Mexico to 
develop a North American energy policy. "The U.S. must develop policies and 
strategies to support the increasing cross-border flows of oil, natural gas 
and electricity within North America," Bush explained. "Governor Bush and his 
Secretary of Energy will work with their counterparts in Canada and Mexico to 
improve oil and gas distribution, enhance the reliability of the North 
American electrical grid, and promote cross-border energy trade. For example, 
Canada and the U.S. could work together to streamline permitting so that a 
natural gas pipeline from Alaska to the Midwest could be built."

On whether to use the strategic petroleum reserve (SPR)to mitigate high oil 
prices, Bush said no. Instead, he would like to create a privately-managed 
Northeast home heating oil reserve. "However, he does not believe that the 
government should be actively trading petroleum products into, and out of, 
storage, as this represents significant government involvement in the oil 
markets," said the paper. "Rather, the government should contract with 
private companies to perform storage services. This will minimize government 
expenditures and interference in the market, while ensuring that heating oil 
supplies will be available when needed."

To help the nation meet "the electricity demands of the new economy," Bush 
pledged to encourage the development of North American oil and natural gas 
resources. As part of this strategy, Bush would propose to open 8 percent of 
the Arctic National Wildlife Refuge "to environmentally responsible 
exploration," which could replace the oil that the U.S. now imports from 
Iraq, and "examine whether certain promising natural gas reserves in federal 
lands should be opened to environmentally responsible and regulated 
exploration."

Bush also recognizes the need for environmentally responsible development of 
existing coal, nuclear, and hydro capacity. Thus, as president, he pledged to 
fund research into "Clean Coal" technologies and support the permanent 
extension of the existing Rtax credit.

To facilitate the transfer of nuclear assets to U.S. utilities specializing 
in operating nuclear power facilities, Bush promised to seek legislation 
clarifying that the transfer of plant decommissioning funds not be taxed as 
part of the transaction. On hydropower, Bush wants to streamline the 
relicensing process and oppose efforts to breach hydroelectric dams.

Bush also insisted that comprehensive electric industry deregulation 
legislation is necessary "to encourage the investment necessary to expand 
electrical generating capacity," maintain reliability, and encourage 
competition. "Having enacted one of the most successful and comprehensive 
electricity deregulation bills in the nation, Governor Bush understands the 
need for complementary federal deregulation legislation," the position paper 
stated.

Thus, as president, Bush would support federal legislation that (1) empowers 
a single organization to oversee reliability concerns and assess penalties 
for those that abuse the transmission grid, (2) protects consumers, and (3) 
repeals the Public Utility Holding Company Act and ends the mandatory 
purchase requirement of the Public Utility Regulatory Policies Act of 1978.

A President Bush would also promote separate legislation (1) establishing 
mandatory reduction targets for emissions of four main pollutants: sulfur 
dioxide, nitrogen oxide, mercury and carbon dioxide; (2) phasing in these 
emissions reductions over a "reasonable" time period; (3) allowing utilities 
to make modifications to their plants without fear of new litigation under 
the Environmental Protection Agency's new source review requirements; and (4) 
providing market-based incentives, such as emissions trading and carbon 
credits, to help industry achieve the required reductions.

To encourage the development of renewable and alternative energy sources and 
to promote conservation, Bush would propose to create a "Royalties 
Conservation Fund" that would earmark royalties collected from new oil and 
gas exploration on federal lands to fund conservation efforts. "It is 
estimated that royalties collected from opening just 8 percent of the Arctic 
National Wildlife Refuge to oil and gas exploration could produce hundreds of 
millions of dollars in royalties annually," the paper noted. Bush would also 
support tax credits for electricity produced from alternative and renewable 
resources.

Finally, among other things, Bush plans to (1) require federal regulators "to 
develop a comprehensive policy for approving pipelines, (2) invest $1 billion 
over ten years "to establish clear rules to help efficient utilities purchase 
nuclear plants, streamline the relicensing process for hydroelectric 
projects, and oppose the breaching of dams"; (3) and propose legislation 
requiring electric utilities to reduce harmful emissions, not just asking 
them to do so voluntarily as advocated by Vice President Gore. 

Folder Name: Utilities, Electric: Deregulation 
Relevance Score on Scale of 100: 97

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