Today's IssueAlert Sponsors: 

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Looking for a billing engine to meet your company's complex billing needs? 
Itron has the technology and industry knowledge it takes to deliver an 
advanced and automated solution. Visit us at the CIS Conference to learn more 
about the MV-PBS Billing and Financial Settlement System, the industry proven 
solution for the critical needs of large revenue customer billing and 
financial settlements. 

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Are you looking to invest in, attract investors for, provide services to or 
understand the business and technology dynamics of the hottest companies 
emerging in the energy sector?   Attend the Energy Venture Fair, June 25 & 
26, 2001, in Boston, MA and hear CEOs from 75 hot energy companies present 
their business plans.  Complete event description available at 
www.energyventurefair.comor call Nannette Mooney at (818) 888-4445, ext. 11. 


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"Global Power & Western U.S. Coal:  Domino Factors at Play in Today's Energy 
Markets" is the theme of the 2001 Spring Pacific Coal Forum (Coal Forum'2001) 
to be hosted by the Western Coal Council, June 4-6, 2001 in Park City, Utah.  
Keynote Speakers include: Honorable Mike Leavitt, Governor, State of Utah; 
Hitoshi Tagawa, Tokyo Electric Power Company; Eng. Jesus Buentello, Comision 
Federal de Electricidad; Malcolm Thomas, Kennecott Energy Company; Manfred 
Raschke, International Strategic Information Services (ISIS).   
Contact Janet Gellici at (303) 431-1456 or info@westcoal.org
www.westerncoalcouncil.org.



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May 17, 2001

Presidents Bush (Former and Current) Speak on Energy Issues 

By Will McNamara
Director, Electric Industry Analysis 

[IMAGE]Introduced and sponsored by LODESTAR Corp.'s CEO Chris Hamilos, 
President George Herbert Walker Bush delivered the keynote presentation this 
morning at the 25th Annual CIS Conference being held in Albuquerque, N.M. The 
41st president of the United States spoke mostly from a personal perspective 
about the highlights of his illustrious business and political career, and 
reiterated his strong support for his son, President George W. Bush, whom he 
affectionately refers to as "43" (as in 43rd president). 

The former President Bush made it clear that he is now enjoying his 
retirement and avoids making public statements regarding political policy. 
However, the former president did field questions from the audience regarding 
a few energy issues and acknowledged the parallels between the issues he 
faced in his administration, and those that are presently challenging his 
son. Much of the buzz throughout the conference focused on the current 
president's just-released energy task plan, a 165-page report that outlines 
approximately 105 steps that the new administration will take to address 
current energy problems. 

Former President Bush recalled the Gulf War and how one of the key issues 
during that time was ensuring energy supply from Saudi Arabia. The former 
president acknowledged that he felt compelled to launch the battle against 
Saddam Hussein, who threatened the energy supplies needed to serve the world. 
Further, President Bush referred to the political challenges he faced in his 
presidency, during which time a predominantly Democratic Congress "that saw 
the big picture issues in a different light" often made it difficult to find 
common ground.  

The former president made only brief (but rather significant) references to 
his son's new energy policy. Having talked with Vice President Dick Cheney 
last evening, former President Bush said he was aware that the new, 
broad-based plan focused heavily on new supply, along with secondary measures 
for conservation efforts. This is an approach that the former president fully 
supports as he noted that "if you want to lower energy prices, you need to 
establish more supply." In addition, the former president offered that 
additional drilling efforts, an element of the plan that has sparked a great 
deal of controversy, "has to happen" if the nation is truly committed to 
increasing supply. However, former President Bush did suggest that the nation 
must be patient as it will take "several years" to see any significant 
decrease in energy prices as economic forces must be allowed to support new 
development efforts. 

Meanwhile, the energy task plan released by the current President Bush this 
morning holds few surprises but continues to spark a great deal of debate. As 
expected, the administration supports efforts for increased drilling of oil 
in Alaska's Arctic National Wildlife Refuge, easing of clean-air rules that 
should support increased power plant production and streamlining the permit 
process for oil refinery expansion and construction. These platforms have 
been in place for months and form the foundation for the energy plan.  

However, new elements of the plan that have emerged just within the last few 
days are raising the most eyebrows. For instance, the extent to which nuclear 
power factors into the administration's energy plan is perhaps greater than 
was previously anticipated. Specifically, the Bush plan proposes the 
extension of the life for aging nuclear plants and the use of so-called 
"breeder reactors," which use spent nuclear fuel. Breeder reactors, although 
rather common in Europe and Japan, have not been used in the United States 
since the 1970s, when it was discovered that the reactors tend to produce 
nuclear weapon-grade plutonium as a by-product.  

Other key elements of the plan include:  

Providing eminent domain authority to the federal government, which would 
supersede states' rights to approve new transmission line capacity. 
Expediting the license procedures for hydroelectric and geothermal plants.  
Streamlining the approval process for power plant siting, and speeding up the 
relicensing requirements for nuclear plants. 
Drafting legislation to cap emissions of nitrogen oxide and mercury, which 
are common by-products of coal-fired production. In turn, the Bush 
administration supports exploring new clean-coal technologies, which should 
increase production by coal-fired generating plants. 
A further study of the current restrictions put into place by the Clean Air 
Act, which presently limits the production at oil refineries and power 
plants. The issue here is whether or not such restrictions should be lifted 
or reduced so that additional oil and power production can be pursued. 

As has been the case since the start of the new administration, the 
continuing criticism of the new Bush plan is that it is overly specific and 
strong on new supply efforts, while remaining vague and noncommittal to 
conservation efforts. However, the specific conservation proposals in the 
energy plan include providing consumers $4 billion in tax credits through 
2007 to encourage the purchase of high-mileage, gas-electric hybrid vehicles. 
In addition, President Bush has proposed providing tax benefits to 
co-generation plants, which produce both heat and electricity. Others, 
including the current president's father, might argue that conservation 
efforts have received just the right amount of attention in the new plan as 
market forces (high prices) already are driving renewed conservation across 
the country.  

Just as former President Bush faced a predominantly Democratic Congress that 
often thwarted his policy measures, the current President Bush continues to 
buck heads with Democrats in Washington who are crafting their own energy 
plan. In fact, just two days ago, a group of House Democrats led by House 
Minority Leader Richard Gephardt (D-Miss.) outlined a plan that calls for 
increased oil drilling and building new pipelines to transport natural gas 
(both of which run rather parallel to the Bush plan). However, Democrats have 
focused more heavily on conservation efforts in their own plan, as 
illustrated by a series of tax incentives to help consumers build energy 
efficient homes and purchase hybrid gas and electric automobiles. 
Consequently, the energy issues continue to sharply divide the two parties, 
although in reality there may enough commonality among Republicans and 
Democrats to support cooperation in Congress. That cooperation may be 
necessary as Congress must approve President Bush's energy plan in order for 
it to take effect. 

TOMORROW: Summary of CIS Conference and analysis of key IT issues facing the 
energy industry. 

An archive list of previous IssueAlerts is available at
www.scientech.com


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