Untitled
THE WHITE HOUSE
Office of the Press Secretary
May 16, 2001
Press Briefing by Senior Administration Official
on the President's Energy Proposal
Senior Administration Official: Thank you very much. The President said last September that this country needed a comprehensive energy strategy, and within a week or so of coming into office he created the National Energy Policy Development Group. As you know, the Vice President is the Chairman of the group. I'm the Executive Director of that group.
I'm going to go through a few of -- just energy facts, first, and give you an idea of what it looks like in the energy area right now.
First of all, the U.S. energy consumption is projected to increase by 32 percent by 2020. The U.S. imported only 36 percent of its oil in 1973, due to an oil embargo. We now import 55 percent of our oil, and it's predicted by 2020, we'll import 67 percent of our oil needs.
Electricity demand is projected to rise by 1.8 percent a year over the next 20 years. That would require an additional 393,000 megawatts of generation capacity, which would mean that we'd have to build, over the next 20 years, 1,300 to 1,900 new power plants.
Impacts on consumers: heating and cooling bills represent about 40 percent of household energy costs. Between 1998 and 2000, family spending on energy rose by more than 26 percent. During the winter of 2000 and 2001, average natural gas heating costs in the midwest rose by 73 percent, from $540 to $933. New Englanders' heating bills rose by 27 percent.
More Americans are applying for federal assistance to pay their energy bills. Last winter, 26 percent more Americans applied for assistance under Low Income Housing Energy Assistance Program.
There are impacts on businesses. For instance, the Federal Reserve reported that businesses across the country experienced much higher energy costs in February 2001, and most were unable to recoup those losses. Farmers, for example, they have a very energy intensive business. The majority of the cost of fertilizer comes from natural gas, as a feed stock, to make fertilizer. Diesel fuel for their tractors and electricity for irrigation -- from everything from irrigation to milking cows.
Transportation sector, gasoline prices are up, were up last summer. Diesel prices have impacted truckers. And in the meantime, if you look at our efficiency over the last 30 years, we have done quite well. Since 1973, our economy has grown by 126 percent. Our energy use has only increased by about 30 percent. We are using energy wiser and better, and we should keep trying to do that. And this plan will show you how to do that.
Alternatives and renewables. I think that, you know, you need a perspective. We need to push for more renewables and alternative fuels. But, currently, only 2 percent of our electricity needs come from non-hydro-powered renewables. It has increased quite dramatically. In the 1990s, it increased 30 percent. Of that, 76 percent comes from biomass. Biomass is like the burning of corn husks to generate electricity. Geothermal accounts for 17 percent of that. Wind accounts for 6 percent -- remember, this is 6 percent of the 2 percent of electricity. Solar accounts for 1 percent of the renewables.
Ethanol production, an alternative fuel, has increased quite dramatically from 200 million gallons a year in 1980 to 1.9 billion gallons today. Natural gas prices have been going up, as you know. Currently, natural gas provides about 16 percent of the U.S. electricity generation. It's the fastest-growing area in electricity generation. Ninety percent of the new projected electricity plants under construction will be fueled by natural gas.
It's estimated an over 50-percent increase in natural gas demand by 2020. That alone will require 38,000 miles of natural gas pipelines and 255,000 miles of distribution lines alone. To put that in perspective, there's about 2 million miles of oil and gas pipelines in the United States currently.
Coal accounts for 52 percent of our electricity generation. Think of that -- one out of two homes -- if you put it in that perspective -- are powered by coal. They estimate we have 250 years of coal reserves at our current production rate. Nuclear, 20 percent of our electricity comes from nuclear power. So one in five homes are powered by electricity, by nuclear power. And you do that with no greenhouse gases -- emissions.
We sort of went about doing the report following a few components. It had a few -- at first three principles that we have to look at the 21st American standard of living. We should look at technology -- leading, cutting-edge technology. No matter whether we're looking at conservation of energy, renewables, alternative fuels, infrastructure or supply of energy -- we had five components: Modernize and increase conservation, expand conservation by increasing funding for energy efficiency programs, encouraging the development of fuel-efficient vehicles, creating tax credits to encourage consumer conservation and expanding DOE conservation programs.
Modernize and expand our energy infrastructure. Outdated regulations have frozen America into an antiquated energy supply network, designed for 1950, not 2050. Our electric transmission system now really was built for a vulcanized system, for just states or a few states, rather than transporting large amounts of electricity from areas that produce electricity to those areas that consume electricity. Natural gas pipelines, we've had some safety issues with them, and need to build much more natural gas pipelines.
Modernize and expand our -- diversify energy supplies. We look to diversify energy supplies, and where we get energy in the United States, from different energy sources, but also diversify our supply internationally.
Improve and accelerate environmental protection. New anti-pollution technologies now allow us to increase our energy production while protecting our environment, using technology. The President's strategy will cut harmful emissions from electric power plants and increase funding for clean coal research. An integrated approach can yield a cleaner environment, a stronger economy, and a sufficient supply of energy for the future.
And lastly, strengthen America's energy security. I touched on this before, that we need to diversify suppliers. We have to protect Americans, especially low-income Americans, from wild fluctuations in energy prices and supply by helping low-income families with heating and cooling assistance, and we need to reduce America's dependence on foreign oil and build stronger relationships with energy-producing nations in our own hemisphere.
I'll go over a few recommendations. There's about 105 recommendations in this report. I'm not going to be able to go through all of those; I'll touch on some of the highlights. There's a mix, obviously, of recommendations. Many are in the conservation or renewables areas. Infrastructure, supply, and then national security, international.
First of all, there will be two executive orders, signed by the President. The first one will direct all federal agencies to consider energy in -- when they do major regulatory actions. When they do a major regulatory action, they would be required to see if it had significant impact on energy, and if it did, would report that as they did their regulation on what that impact was, what some of the alternatives would be, and do that in an environmentally responsible manner.
Another executive order would direct the agencies to expedite permits and other federal actions necessary for energy related project approvals, while protecting the environment. This would create a system that would try to eliminate redundant permitting. And we work with a local and state governments on their permitting, to make sure that we were coordinating with them.
LIHEAP and weatherization. We take steps to mitigate the impacts of high energy costs on low-end consumers, strengthen LIHEAP by making $1.7 billion available annually, an increase of $300 million over regular appropriations. And in an innovative approach, we would take oil and gas royalties and when prices were very high, you would use some of those royalties to pay for LIHEAP. We would have to set up a system and it would instruct the Secretaries of Interior and Health and Human Services to work together on such a program. When people are least able -- those people are least able to afford these high energy prices, the money that the government would reap from the high royalties on oil and gas would go to those low income families.
Increase funding for weatherization assistance program -- also for low-income families -- by $1.2 billion over 10 years. This will roughly double the spending over that period.
On the environment, the report would direct the EPA Administrator to propose multi-pollutant legislation. It directs Governor Whitman to work with Congress to propose legislation that would establish a flexible market-based program to significantly reduce and cap emissions of sulfur dioxide, nitrogen oxides and mercury from electric power generators. This will allow us to provide significant public health benefits while also allowing us to increase electricity supplies.
In the conservation area, it would direct the Secretary of Energy to review current funding and performance of energy efficiency research and development programs, and then to propose appropriate funding levels for these programs that are performance based and modeled after public/private partnerships.
It would direct the heads of federal departments and agencies to conserve energy use at their facilities, to the best of their abilities. It directs agency heads to encourage increased energy efficiency through combined heat and power projects. Many of you know what those are, but it's like a generating facility, it generates electricity, you also produce steam in doing that and use that to heat buildings, houses, downtown areas. Very efficient systems. It would provide a tax credit or depreciation life schedule. The Secretary of Treasury will work on that provision. The President is actually going to visit one of those tomorrow, in St. Paul.
It directs the Secretary of Transportation to review and provide recommendations in establishing corporate average fuel economy standards, with due consideration given to the National Academy of Science study to be released in July of 2001. They would be based on sound science. It directs the Secretary of Transportation to review and promote congestion mitigation technologies and strategies, to work with Congress on legislation to implement them.
It directs the Secretary of Treasury to work with Congress on legislation to increase energy efficiency with a tax credit for fuel-efficient vehicles. This would establish a temporary efficiency-based income tax credit available between 2002 and 2007 for new, hybrid and fuel-cell vehicles. Many of you know what those are, but the hybrid vehicles run off gasoline and electric power, and even the braking system generates electricity to charge the batteries.
Fuel-cell vehicles -- for example, they have hydrogen fuel-cell vehicles not on the market, but in the technology stage. I've driven them, and they're fascinating. They have zero emissions. The only emission they have is warm water. Obviously, very expensive technology, but they're working on it. Ford Motor Company has prototypes already.
Supply and renewables -- a supply of energy, we direct the Secretaries of Energy and Interior to reevaluate access limitations on federal lands in order to increase renewable energy production. Biomass, wind, geothermal, solar, for example -- directs the Secretary of Energy to review current funding and historic performance of renewable and alternative energy R&D programs, and then to propose appropriate funding for those programs that are performance-based and modeled as public-private partnerships.
Directs the Secretary of Treasury to expand tax credits for new landfill methane projects. This would allow methane from landfill projects to be used to generate electricity and will provide a tax credit for doing so. Has the added benefit of the methane not going into the atmosphere, but using it to produce electricity instead. You're utilizing a landfill and you're generating electricity as well.
And directs the Secretary of the Interior to examine ways to reduce delays in geothermal lease processing on federal lands. It directs the Secretary of Treasury to work with Congress on legislation to extend and expand tax credits for electricity produced using wind and biomass, and provides a new 15 percent tax credit for residential solar energy property, up to a maximum of $2,000.
It directs the Secretary of Energy to develop next generation technology, including hydrogen. And the non-renewable energy supplies, it directs the Secretary of the Interior to expedite the ongoing study of impediments to federal oil and gas exploration development, and to review public lands and withdrawals and lease stipulations, with full public consultation, especially with the people in the region.
It directs the Secretary of the Interior to work with Congress to authorize exploration, and if resources are discovered, development of the 10-02 area of ANWR, using the best available technology and requiring no adverse impact to the surrounding environment.
And it directs the Department of Energy to continue to develop clean coal technology, by investing $2 billion in new money over 10 years to fund clean coal research, supporting -- and it would also support a permanent extension of an existing R&D tax credit that benefits clean coal.
In the area of nuclear power, recognizing that 20 percent of our electricity comes from nuclear power and emits no greenhouse gases, there's provisions that would encourage the expansion of nuclear facilities. It would encourage the NRC to ensure -- the Nuclear Regulatory Commission -- to ensure that safety and environmental protection are high priorities in evaluating and expediting applications for licensing new advanced technology nuclear reactors.
Encourage the NRC to facilitate efforts by utilities to expand nuclear energy generation in the U.S. by uprating existing nuclear power plants safely. Uprating is making a plant more efficient through the fuel cycle so they can produce electricity -- more electricity from their current plant.
Directs the Secretary of Energy and the EPA Administrator to assess the potential of nuclear energy to improve air quality, and consider technologies to develop reprocessing and fuel treatment technologies that are cleaner, more efficient and less waste intensive. It would also support legislation to extend the Price-Anderson act for liability of nuclear accidents.
We encourage FERC and direct federal resource agencies to make hydropower licensing process more clear and efficient, while preserving environmental goals and optimizing the efficiency and our liability of existing hydro power projects.
For infrastructure, direct the Secretary of Energy and appropriate federal agents to take actions to remove constraints on the interstate transmission grid and allow our nation's electricity supply to meet the growing needs of our economy.
It directs the Secretary of Energy, in consultation with appropriate federal agencies and state and local government officials, to develop legislation to grant authority to obtain rights of way for electricity transmission lines, with the goal of creating reliable national transmission grid.
Support legislation to improve safety of natural gas pipelines, protect the environment, strengthen emergency preparedness and inspections, and bolster enforcement.
It directs the EPA Administrator, in consultation with the Departments of Energy and Agriculture, as needed, to support study opportunities to maintain or improve the environmental benefits of state and local boutique fuel programs, while at the same time exploring ways to increase the flexibility of the fuel distribution infrastructure, improve fungibility and provide added gasoline market liquidity.
And it directs the EPA Administrator, in consultation with the Secretary of Energy and other relevant agencies, to review new source review regulations, including administrative interpretation and implementation, and to report to the President within 90 days on the impact of the regulations on investment and new utility and refinery generation capacity, energy efficiency and environmental protection. This is a program that some believe is preventing some facilities from improving their efficiency, from putting on new technology to increase their power or to become more efficient.
Global climate change -- there's a recommendation that directs federal agencies to support continued research into global climate change, continue efforts to identify environmentally and cost-effective ways to use market mechanisms and incentives, continued development of new technologies and cooperate with allies, including through international processes to develop technologies, market-based incentives and other innovative approaches to address the issue of global climate change.
So there's many -- obviously, that's not all 105 recommendations; there's many more. But I sort of gave you the highlights in certain areas. You will see that there are many in the conservation and renewable areas as well as infrastructure and supply. And with that, we can take questions.
Q: What happened to dissenting ideas, or how was that recommendation --
Senior Administration Official: They were discussed. It was really a heartening process to work with this group, because you had a situation where you had the Vice President and the Cabinet members and senior White House staff who were at a table, working together with one issue in mind -- energy, producing energy, energy infrastructure and keeping the environment in mind. And those were all represented at the table.
So there was a decision-making process, and what was amazing is, yes, there is differences of opinion, but they worked very well together and as a team and came up with these recommendations.
Q: They were all happy --
Senior Administration Official: Yes, they all support this report and the recommendations in question.
Q: -- supplemental budget request? A lot of these programs would either or cut or staying at the budget the President's proposed.
Senior Administration Official: In a couple areas, you're right. For R&D for energy efficiency, R&D for renewables, it gives the opportunity for the Secretary of Energy to review those programs, to see how they were working, to make sure that they're going to be performance-based. And public-private partnership is going to be stressed. And then he's going to give recommendation on the funding levels for those programs.
Q: Do you have a ballpark total on how many tax credit -- new tax credits you're proposing, even in order of magnitude of what those could cost the Treasury over a five or 10 year time frame?
Senior Administration Official: New ones -- and I would describe them as new ones not in the budget -- some of these are in the 2002 budget because they were campaign proposals and therefore, in the budget. Then I would say there's about $5 billion in additional new proposals.
Q: Over what time period?
Senior Administration Official: Over 10 years. Is that right -- 10 years.
Q: Billion? B as in boy?
Senior Administration Official: B as in boy. You bet.
Q: I sort of missed what you said. What specifically are you recommending on that and will it have any effect -- will your recommendations have any effect on gas prices this summer in places like the Midwest that use a lot of these boutique fuels?
Senior Administration Official: What it does is have the EPA Administrator review the program and review the boutique fuels and look at them for their environmental benefit and also their fungibility and liquidity. In other words, one of the difficulties with the boutique fuels is you have refineries that can only produce that one fuel and other refineries can't produce that. It needs to be looked at whether you can try to get some of these fuels moving around, make them more liquid -- interchangeable and that's what the review would be about.
Q: What's the time frame on that?
Senior Administration Official: There's no time frame on that. She'll be working expeditiously on it.
Q: -- have any effect on this summer's prices?
Senior Administration Official: I think that one of the problems this summer is these refineries are at near capacity. So it's difficult even with the boutique fuels. The boutique fuels have more of an issue, I think, for spikes in some areas, when you have either refinery problems, pipeline problems and those kinds of things. It could have an effect. She's going to work very hard on it.
Q: Could you list which of the recommendations have specific implications for California, both in the short-term and in the long-term?
Senior Administration Official: Well, what I'd suggest is that much of the plan has implications for California -- in the short-term and the long-term. Because the quicker you implement this policy, the quicker we're going to get rid of some of the problems like California and take care of those problems.
Q: What specific? I mean, what in this plan is going to help deal with rolling blackouts and shortages and high prices in California this summer?
Senior Administration Official: One of the things, actually, is the expedited permitting alone. It's an executive order. Already, the President has directed the agencies to work with California, and when the governor requests, expedite the permitting process on the federal side. That has already produced peaker plants coming on line in California. So that's an example of something that can work immediately.
You know, the other thing I would suggest is that you've got to look at this from the perspective that it's been neglected for a long time. It's going to take some time. There is only two things that can help California right now -- increasing supply or decreasing demand. And there is limitations -- in the case of the permitting, we're expediting those as quickly as possible.
Q: On nuclear power, what's the administration willing to do to settle this business of permanent storage facilities for spent fuel rods and petrified waste? And is it considering to split off the disposal issue from the defense needs to commercial power needs?
Senior Administration Official: There is extensive discussion on nuclear spent fuel issues in the report. The recommendation, along with other nuclear recommendations, says that we should use best science in finding -- the best science to look to a deep geologic repository for nuclear waste. That's the extent of it. It's in the hands of the Department of Energy where it should be. They're looking at that program, they're looking at a site determination. The scientists are looking at it, and the Department of Energy has that program.
Q: You said that you will consider nuclear reprocessing. I think that has been strictly -- you have been away from that for a long time. So you're now stepping into the reprocessing business?
Senior Administration Official: It isn't stepping into the reprocessing business. What it is doing is reviewing the policy of reprocessing. You're correct. Since the late '70s, the policy has been not to reprocess spent nuclear fuel. What this does is has the agencies review that policy.
Q: You don't rule out --
Senior Administration Official: That's correct.
Q: The question on a lot of people's minds today is that they see their energy prices increasing 25 percent, 30 percent, but at the same time, they're saying that some of the energy companies are increasing their profit by 500 percent. And the question is, have you looked at this question of pricing, because it's not simply the access to energy, but there are instances where prices are being kept up artificially. And is there some way, in your program, that you want to take a look to make sure that there is energy available at a reasonable price, that there can't be like gaming the market and things like that.
Senior Administration Official: The President addressed that today in a meeting with the Cabinet, when the President said that he would ask the appropriate agencies, in this case the FTC, -- to monitor it and make certain that if there is anything, that they take all appropriate action. But the President is very concerned about prices.
Q: This is in specific cases, but I mean, more generally, is there a mechanism so that can be watched?
Senior Administration Official: The FTC is enforcing actions, that the President announced today.
Q: I'm not sure that I have the timing exactly right, but it strikes me that the Vice President and others in the administration have been talking generally about the program for about two weeks. It's been starting to kind of come out in pieces. And my question is, was there any adjustment made to the plan as a result of whatever feedback you guys might have been getting in the last couple weeks since it's been sort of "in the air"?
Senior Administration Official: No, there wasn't any adjustment. I mean, we worked from day one putting certain issues down that we thought we had to address and that's where we've come from and it's never diverted from that. The fact is that what provisions are in there, those come over time, and what recommendations through the process. But there was no change of course because of things that were put in the press or said in the press or other things.
Q: I want to ask you about the plan to earmark $1.2 billion of the money from leasing ANWR for alternative energy sources. First of all, is that the only money that will be available for alternative energy sources? And, I would think environmentalists are going to say you're asking them to make Prostian bargain, trade off on ANWR to get alternative energy resource?
Senior Administration Official: The answer is, no, that there's others. In fact, I went through several of them. Extends and modifies the tax credit for electricity for wind and biomass, provides a tax credit for residential solar energy systems, modifies the treatment -- extends the hybrid vehicles I went through.
Research and development, I went through that, that the Secretary of Energy is reassessing the funding levels for that, is going to make recommendation on those.
Q: Though that funding would come separate from the ANWR?
Senior Administration Official: Correct. That's correct, yes.
Q: Of the international initiatives to increase resources, do any of them involve direct or upgraded talks with OPEC and other large producers?
Senior Administration Official: We don't have direct recommendations on OPEC. You will see from the international section that we often times make recommendations on efforts and regions. But we don't address OPEC directly.
Senior Administration Official: The President's policy on that is that United States has been discussing with OPEC member nations as well as other -- nations. And those talks are going to be ongoing; they are quiet, diplomatic conversations. They're ongoing.
Senior Administration Official: Aside from that, there is a discussion in the international section on the importance of increasing stockpiles of oil, both at the IEA countries and in non-IEA countries -- in China -- excuse me, in Asia. And so you'll see a discussion of that. And also data sharing internationally. One of the reasons that consuming and producing nations have trouble with volatile prices is because of inadequate data. So you'll see a reinforced dialogue both on the use of stocks by IEA countries and non-IEA countries, and here we're looking at Asia -- and improved data sharing. International Energy Agencies, IEA is the oil subgroup of the OECD.
Q: In farming, everything from manufacturing gas to run the tractors, every step of the way, irrigation of fields, there seems to be energy involved. Has the task force looked at all at what impact the summer shortage that is projected would have on food prices?
Senior Administration Official: It doesn't go into an analysis of exact impacts on food prices. It does have discussion on how it affects farmers. So indirectly, it does. The fact is, is the unfortunate thing for farmers is the price of their crops have been decreasing and the cost of energy has been increasing.
Q: Some of that would have to get passed along.
Senior Administration Official: I would expect, but we didn't get into that in the report.
Q: Besides the tax breaks, what are some of the other major things that require congressional action?
Senior Administration Official: ANWR. There's 20, I believe, different provisions in here, recommendations that when we work with Congress or propose legislation in Congress -- multipollutant legislation, for example, would require legislation. Okay. LIHEAP, weatherization, the combined heat and power -- you mentioned that, but there are other provisions in there, too. The Secretary of Energy will propose comprehensive electricity legislation to Congress.
Q: Is there a deadline for that?
Senior Administration Official: There's no deadline for that.
Q: -- kind of characterize the balance between how much you can do administratively versus what will be required --
Senior Administration Official: I think those things are difficult to quantify just by counting up recommendations. People want to quantify by counting them up, and actually, it doesn't --
Q: That's not on your key fact sheet here.
Senior Administration Official: Yes, I know. That's why I said there's efforts to do that. And it does, and I can go through some of that. Forty-two of the recommendations will modernize -- okay, you have those -- 12 of the recommendations can be implemented by executive action or executive order, 73 --
Q: Will they be?
Senior Administration Official: Will they be?
Senior Administration Official: We'll announce when the President signs them.
Q: So you don't have them all ready to go out across his desk?
Senior Administration Official: Just a couple of them.
Senior Administration Official: It will be the two executive orders. Keep in mind, what I said is the executive action, not necessarily --
Q: -- that will quantify goals? For example, cubic feet of gas, barrels of gasoline, kilowatt hours that you want to achieve between now and 2010 or 2011, and do you think the target's out there?
Senior Administration Official: We talked a lot about that, and you can set targets for everything. That's one of the difficulties. And the problem with targets is that it takes away, I think, from looking at it sort of holistically. We have to do a lot of things. We have to increase conservation and we need to increase supply. And we had that debate. So actually it does not set targets. It sends us in a direction that we have to try to increase our conservation efforts. And you can do that through a number of recommendations to increase our energy supply, through recommendations.
Q: You mentioned $5 billion in new proposals over 10 years, and you also mentioned about $2 billion related to coal. Of the remaining $3 billion, could you give us, what, two or three of the other big ticket items are?
Senior Administration Official: Well, one of the things I'd suggest is that the coal is not included, because that's in the current 2002 budget. That's what I'm saying by new, is that these are things $5 billion additional to what was in the 2002 budget, okay?
And so it would be $10 billion total, approximately, $5 billion in new, meaning not in the 2002 budget already. For example, the hybrid vehicles would be $4 billion over 10 years. Actually, the hybrid vehicles is 2002 to 2007, so it would be six years of the tax credit.
Q: That's $4 billion out of the $5 billion?
Senior Administration Official: Yes. Actually, it's $6 billion in new -- $6.3 billion, I'm sorry. A billion dollars for landfill gas projects that I talked about.
Q: Is that the total cost of the plan, tax credits and also increases in funding for research and development. Do you have a total dollar figure?
Senior Administration Official: Well, some of the research and develop things gives the Secretary of Energy the ability to go back, review the programs and recommend funding. We expect him to do that. But it doesn't -
Q: This isn't funded?
Senior Administration Official: I expect there will be increases in funding in those areas. But we don't give an estimate -- that's the responsibility of the Secretary, to go back and look at those programs and review them.
Q: On the budget, during the campaign last year, the President and the Vice President made some comments on their parameters for a repository. You had mentioned -- science among them. Are the recommendations in this report consistent with what was said during the campaign? And when you all are going over your options on nuclear waste, was their discussion on the task force as to what we said last year, last fall?
Senior Administration Official: I believe they are all consistent. They are all consistent with campaign promises. That's an important thing that you follow through on those campaign promises. There was not discussion in the group that they be consistent with those and deliberated. Now, when we were going about putting the recommendations, of course we kept those campaign promises in mind.
Q: Sir, are you going to recommend a gas pipeline from Prudhoe down to Alberta as part of this, with all the pipeline stuff in here?
Senior Administration Official: Yes, there's a recommendation that says that the United States should work with Canada, that the Department of Energy should work with the state of Alaska on expediting natural gas pipeline from Alaska North Slope to the lower 48.
Q: -- on expediting permitting, or is there anything about a production tax credit or --
Senior Administration Official: Let me read that one. Can you find that while I do another question?
Q: On public lands, you mention that major regulations would have to have energy taken into account. A two pronged question, would major regulations include a land management or a management plan for public lands? Or how does it impact land management? And when energy is taken into account, is there something that says, if it wipes out an energy source, then you can't have this regulation?
Senior Administration Official: The first part of the question is, yes. If there is a major regulation in any area, including the public lands -- you would expect that would -- there are certain size of the regulation. It has to be a major regulatory action. So that has to do with a $100 million effect or something like that. And then this provision would kick in. And then you would look to see if it had significant energy impacts, and if it did, they would have to report on that.
It does not say that they cannot do the regulation. It is just that we want to make sure that we're aware of the energy effect and that we also can look at other options. So by no means does it say the regulation could not go into effect if there's major energy impact.
Q: Democrats have been criticizing this plan even before it was released, saying that it was as if it was written by the energy industry. Is there anything in the recommendations you can point to that the energy industry, oil and gas or whatever, would not be pleased with?
Senior Administration Official: Well, I mean, that's a good point. One of the things we don't do is provide tax incentives for oil and gas. You'll see that every tax incentive is for conservation and renewables. The only other one I can think of is clean coal technology and to make coal emissions cleaner. So that's one area, yes.
Q: You requested a number of studies by the EPA, DOE, DOI on environmental impact. But was there any attempt in your putting this together to set some sort of tolerance for environmental impacts, an acceptable level? Or is it just whatever it takes?
Senior Administration Official: Whatever it takes for production of energy?
Q: Yes.
Senior Administration Official: No, there is no -- we're not trying to set a standard here. What we're trying to do, what we are doing in this report is stressing using best technology, best science, when we're dealing with the energy issues and make sure that the environment is protected at the same time.
Q: Would you explain, please, the guidance of the Energy Secretary on new source review. If the Secretary goes back and looks at that and finds that the enforcement of that rule has changed, what then?
Senior Administration Official: Well, it's the EPA Administrator, first of all, working with DOE. But they have to review it and give a recommendation on it.
Q: If they found the perhaps the Clinton administration had changed the way that policy was handled, would you then try to take it back --
Senior Administration Official: The provision doesn't say to go look to see whether it has been changed. The provision says that you'd look at it and see how it affects energy, how it affects the environment and report back on those effects and recommendation.
Q: One of the problems that they've talked about in the Northeast, in terms of high prices and things of that sort is difficulty in getting a product -- do you all deal with that in any way, by way of pipelines recommendation, or anything --
Senior Administration Official: Yes, we do. I mean, just in the expediting of permitting and the coordination of permitting alone I think helps in providing construction of gas lines and other energy facilities.
Q: This report doesn't deal with anything specific?
Senior Administration Official: Nothing specific for the Northeast, other than the Northeast heating oil reserve.
Q: Aside from ANWR, what do you have in the report in terms of specifics of where you think gas and oil should be developed on public land? You make mention of monuments, wilderness areas, proposed wilderness areas?
Senior Administration Official: No.
Q: And offshore drilling? To what extent do you go into that subject?
Senior Administration Official: The specifics really settle on a couple areas. ANWR. National petroleum reserve, Alaska, directs the Secretary of the Interior to look at leasing some more area there that was reserved for oil exploration and development. Some areas have already been leased. And that's pretty much.
For offshore, it just directs them to proceed on their five-year plan, which they have been working on in the normal course of business.
Q: Would that be sale 181 --
Senior Administration Official: Sale 181 is not addressed in the program. That's in the hands of the Department of the Interior to follow through on their five-year plan. What the report does in those kinds of instances in the oil and gas area is that it leaves it in the hands of the Secretary of the Interior.
Q: -- on the federal lands of the lower 48 then?
Senior Administration Official: Well, I read a provision there where she is looking at federal lands everywhere in the United States in assessing their energy potential. It's an ongoing study. And then gathering input, finding out what kind of impediments and what kind of environmental sensitivities. And then she'll give recommendation on that.
Q: How soon would you say?
Senior Administration Official: There's no time limit on it. Was there a time?
Senior Administration Official: No, there wasn't, but we did see --
Q: Can you elaborate on why New Hampshire is going to have to conserve power to avoid blackouts this summer? And will it affect other surrounding states?
Senior Administration Official: There are many states, actually, that have that kind of situation. New York City, New York, for example. It's probably a transmission issue there. New England, specifically, is one of those areas that are facing those kind of tight electricity markets.
Q: A follow-up on that. Elsewhere in the section of regional U.S. energy challenges, there are a lot of worst case scenarios that sort of foretell a long, hot, ugly summer. And yet if I'm hearing you right, there's really not much in this, in the task force recommendations, that would deal with that in the short run, correct?
Senior Administration Official: I talk about the permitting issue. There is a provision on Path 15 in California, for example, that the Secretary of Energy and the Western Area Power Administration, I guess, would look into helping out on that Path 15 transmission bottleneck. And then -- but conservation provisions. And then the permitting issues, which we're already expediting in the case of California.
Q: I mean, you can expedite the permits. You're not going to have the plants on line by this summer.
Senior Administration Official: That's part of the issue, isn't it? You've got to increase supply, you've got to decrease demand.
Q: On the nuclear section, do you specifically consider or envision revisiting the issue of breeder reactors? Is that one of the technologies --
Senior Administration Official: No. No, it's more general than that. It says that you should review the process --
Q: -- export controls -- are they in, specifically?
Senior Administration Official: I don't think -- there's nothing in the report on export controls.
Q: In nuclear under Price-Anderson, you said you are endorsing the extension of Price-Anderson.
Senior Administration Official: Yes.
Q: Do you address any change in the contribution limits or the liability limits?
Senior Administration Official: It leaves up to the discretion of working with Congress on that. We don't get into specifics about that.
Q: Do you have any recommendations on the Northwest aluminum industry in the report?
Senior Administration Official: There is discussion, if I'm not mistaken, in the report about some of the problems with the -- problems in the industry there.
Q: Do you make recommendation on what to do with that end stream?
Senior Administration Official: No.
Q: Is there anything in the plan to ask the Interior Secretary to expedite the review of wilderness study areas in particular?
Senior Administration Official: No.
Q: Can I just clarify something that you said before? Is it $5 billion in new tax credits --
Senior Administration Official: $6.3 billion. Yes.
Q: That were not included in the budget or --
Senior Administration Official: Correct, in the 2002 budget.
Q: Is the total, then, in tax credits $11.3 billion, rather than $10 billion?
Senior Administration Official: The total is $10 billion: $6.3 billion and then about $3.5 or so billion.
Q: Can you breakdown the $6.3 billion a little bit?
Senior Administration Official: It's $4 billion for hybrid vehicles and the fuel cell vehicles; $1 billion for the landfill, methane gas for electricity. And then combined heat and power equipment, as much as -- this is an estimate, because we give options. There is a seven year depreciation recovery period, or a shorter depreciation -- actually, we don't say seven year, but shorter depreciation recovery period. Or an investment tax credit, would be $2 billion to $3 billion.
Mr. Fleischer: Thank you very much, everybody.
END 9:02 P.M. EDT
end transcript
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Energy
