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August 6, 1992
PRESIDENT BUSH ON ENERGY:
ACCOMPLISHMENTS AND INITIATIVES
"The driving force behind [our National Energy Strategy] is
straightforward. It relies on the power of the marketplace,
the common sense of the American people and the responsible
leadership of industry and government."
President George Bush
February 20, 1991
Summary
o The President introduced his National Energy Strategy (NES)
a year and a half ago. The NES is a comprehensive and
balanced approach toward energy production and efficiency
and will improve our Nation's energy security, enhance
environmental quality, and spur economic growth.
o The NES builds on the President's record on energy and
includes incentives to increase domestic production of oil
and gas, promotes energy efficiency and conservation,
encourages development and use of renewable and alternate
sources of energy, and supports the clean use of our
Nation's abundant coal resources and the safe use of nuclear
power.
o The President's NES includes measures to increase domestic
energy production and efficiency. It does not impose new
taxes or harsh command and control regulations on American
industry and consumers. Instead, the NES removes regulatory
barriers, relies on competition, and invests in research and
development to achieve our energy goals. For example, it
removes many of the current tax penalties on domestic
extraction investments and at the same time relieves many of
the regulatory burdens that prevent cleaner burning natural
gas from reaching the marketplace.
Oil and Gas
o From his business experience as an oilman in Texas,
President Bush understands how important the oil and gas
industry is to the United States. He is committed to
restoring jobs to this vital and valuable sector of our
economy by encouraging domestic production and reducing the
need for imports.
Energy -- page 2
o President Bush has proposed that Congress reform the
Alternative Minimum Tax (AMT) as it applies to domestic oil
and gas industries in order to remove serious disincentives
to production. He has also fought Congressional efforts to
restrict state prorationing and to expand the moratorium on
leasing in certain areas of the outer continental shelf.
o President Bush opposes an amendment recently passed by the
House of Representatives which would prohibit certain forms
of state regulation of natural gas production. This
restriction on gas prorationing provides unnecessary Federal
regulation and would hinder states from conserving
resources, preventing waste, and protecting the correlative
rights of gas producers and land and royalty owners.
o President Bush pushed for and signed the Natural Gas
Wellhead Decontrol Act of 1989, which will completely
eliminate natural gas wellhead price controls by January 1,
1993.
o The Bush Administration has proposed reducing royalties paid
by stripper wells on Federal lands. The revised regulation
will create a sliding royalty scale that will provide an
incentive to continue operating marginal wells that are in
danger of shutting down.
o The President pushed through Congress $2.25 billion in oil
and gas tax incentives in 1990, about $1.9 billion of which
will accrue to the benefit of independents.
o The Administration has proposed increased funding for
natural gas research and development, particularly for
technologies to increase utilization of natural gas for
environmental compliance. The Department of Energy has also
restructured its natural gas program to shift research and
development activities to meet nearer-term objectives and
cost-sharing investment with industry.
o In order to free oil producers from unnecessary governmental
burdens, the President's NES includes measures to reduce
regulatory barriers and to enhance domestic energy
production which could increase U.S. oil production by 3.8
million barrels per day over the next twenty years. The NES
as a whole will reduce projected oil imports by one-third.
o The President strongly supports efforts to develop new oil
recovery technology as a means of keeping our oil industry
healthy in the long-term. A central component of the NES is
a new program of joint Federal/private investment to advance
oil recovery technology. The initial 14 projects were Energy -- page 3
approved in 1992 with a value of $97 million. The NES oil
research program includes an aggressive technology transfer
component specifically designed to assist independent
producers.
o The President supports the expansion of worldwide strategic
petroleum stocks available to offset future oil supply
disruptions and has resumed fill of our Nation's Strategic
Petroleum Reserve.
o As a part of his National Energy Strategy, the President has
announced measures which will allow the gas business to
operate with more flexibility and to seize market
opportunities by removing regulatory barriers which impede
natural gas use.
-- Initiatives in President Bush's NES are expected to
increase consumption of clean burning natural gas by
20% or about 3.8 trillion cubic feet by the year 2000.
-- Revenue for domestic producers of natural gas is
projected to increase by over $50 billion during the
period 1992-2000.
o President Bush knows that access is vital to the U.S. oil
and gas industry. His NES calls for access to the
previously restricted coastal plain of the Arctic National
Wildlife Refuge (ANWR) and some Outer Continental Shelf
areas under strict environmental safeguards. At the same
time, the President has safeguarded the integrity of these
areas by signing the Oil Spill Pollution Act, which requires
double hull tankers, a $1 billion cleanup trust fund, and
increases polluter liability and enforcement tools. The NES
also supports an increase in the production of California
heavy oil and access to export markets.
o To promote domestic gas production, the President's NES
proposes legislation which will streamline gas pipeline
construction regulations and develop more efficient
environmental review procedures. In addition, the Federal
Energy Regulatory Commission issued the most sweeping
reforms of natural gas transportation in fifty years (the
"restructuring" rule) and removed regulatory barriers to the
use of natural gas vehicles.
o NES recommendations on alternative fuels and electricity
regulatory reform through amending the Public Utility and
Holding Company Act and issuance of the "WEPCo" rule will
also substantially increase utilization of natural gas.
Energy -- page 4
Nuclear Energy and Coal
o The President's National Energy Strategy proposes
legislation to reform the nuclear licensing process and the
removal of other barriers to permit nuclear power to
contribute cleanly, economically, and safely to our future
electricity needs. In addition, the Administration
supported issuance by the Nuclear Regulatory Commission of a
final rule for the renewal of existing nuclear powerplants'
licenses where safety can be assured.
o The NES supports research on next generation and advanced
reactors. In February 1992, the Department of Energy signed
a cooperative agreement with industry to jointly fund a $200
million effort to develop advanced light water designs to
the point of commercial standardization.
o The NES also contains initiatives to ensure progress on the
management and disposal of nuclear waste, and the Department
of Energy has resumed investigative work at the Yucca
Mountain candidate site after successful conclusion of years
of legal dispute.
o The President has supported full funding, including $500
million in the fiscal year 1993 budget, for the Clean Coal
Technology Demonstration Program, a $5 billion industry
cost-shared demonstration program aimed at introducing
innovative methods of using our Nation's abundant coal
resources more cleanly, efficiently, and economically.
o The Administration has expanded efforts to promote the
export of U.S. coals and clean coal technologies to enhance
the U.S. balance of trade, create American jobs, and aid
both economic growth and environmental protection in
countries facing rapid increases in electricity demand.
o The Administration issued regulations (the "WEPCo" rule) to
facilitate compliance by the electric utility industry with
new Clean Air Act requirements and remove uncertainty about
power plant modifications under the new source review
requirements.
Renewable Energy and Alternative Fuels
o The Bush Administration has encouraged development and use
of renewable energy sources such as solar, wind, and
hydroelectric power and other energy sources like ethanol.
The President's FY93 budget increases renewable energy
research and development to $250 million, over 65% more than
when he took office.
Energy -- page 5
-- In addition, the President established the National
Renewable Energy Laboratory in September 1991,
indicating the importance attached by the
Administration to renewable energy research.
o The President signed legislation extending tax incentives
for domestically produced ethanol through the year 2000.
These incentives, totalling more than $220 million over five
years, will help the farm economy and ensure the widespread
availability of this clean, secure fuel. The Administration
also supports legislation to remove an artificial barrier to
greater use of ethanol by expanding tax exemptions and
credits for ethanol blends.
-- In addition, the Bush Administration has launched an
accelerated research effort to develop cost-
competitive, clean-burning domestic fuels from a wide
variety of agricultural products. The President
proposed spending more than $50 million on this
initiative in fiscal year 1993.
o The President has supported legislation extending renewable
energy investment tax credits for solar and geothermal
facilities.
o The President signed legislation amending the Public Utility
Regulatory Policy Act (PURPA) to allow large facilities
using renewable energy projects to qualify for the benefits
PURPA provides. As part of the National Energy Strategy,
the Bush Administration proposes to further amend PURPA to
remove project size limits in PURPA and reduce fuel use
restrictions for such facilities.
o The Administration issued new regulations to simplify the
process for improving efficiency at privately-owned but
Federally licensed hydroelectric projects and launched
Hydropower 2002 an initiative to improve efficiency and
increase production at Federal hydropower facilities. As
part of the National Energy Strategy, the Administration has
proposed substantial regulatory reform to enable us to take
advantage of our ample hydroelectric power resources,
especially those at existing dams, while protecting
environmental quality.
o The NES further encourages the development and use of
alternative fuels and technologies through research and
development and by requiring centrally-fueled fleets to
purchase vehicles capable of using alternative fuels. The
President has directed all Federal agencies to maximize
their purchases of alternative fuel vehicles. The
government has already purchased over 3,000 such vehicles
and plans to acquire 5,000 more in FY93.
Energy -- page 6
o In October 1991, the President announced the creation of the
U.S. Advanced Battery Consortium, a four-year, $260 million
joint research venture with the Nation's three largest
automobile manufactures, the electric utility industry and
others to develop a new generation of batteries to make
electric vehicles attractive and available by the year 2000.
Increasing Energy and Economic Efficiency
o Along with increasing energy production, President Bush is
committed to achieving greater efficiency in every element
of energy production and use. The President's FY93 budget
proposes over $330 million for conservation energy research
and development, double the amount when he took office.
o The President, leading through example, issued an Executive
Order on Federal Energy Management, directing all Federal
agencies to reduce overall energy consumption in Federal
buildings by 20% by the year 2000 and to reduce fuel
consumption in Federal vehicles by 10% by 1995. These
conservation measures will save American taxpayers an
estimated $800 million in annual energy costs and cut
Federal energy consumption by about 100,000 barrels per day
of oil equivalent.
o To increase efficient use of energy, the Department of
Energy has strengthened efficiency standards for many
energy-consuming household appliances.
o The Administration also initiated a number of voluntary
programs to increase private investment in more efficient
lighting, building, computer and related technologies in
support of the energy, economic and environmental objectives
of the National Energy Strategy.
o The President signed the National Affordable Housing Act,
which includes provisions for energy efficiency standards
for new construction of publicly-assisted housing and for
mortgage financing incentives for energy efficiency.
o The Bush Administration has expanded efforts to support
development by States and utilities of integrated resource
planning, a process in which new supply resources and
investments in energy efficiency compete to satisfy
electricity needs. The Administration also provided tax
free treatment of utility discounts on consumers'
electricity bills for efficiency investments.
o The Bush Administration has supported legislative and
regulatory changes to reduce electricity prices to consumers
through increased competition in wholesale power markets and
expanded access to electricity transmission services.
Energy -- page 7
o The President proposed, negotiated, and signed into law
major new transportation legislation, the Intermodal Surface
Transportation Efficiency Act of 1991, which will reduce oil
use in the transportation sector by increasing Federal
funding of mass transit and by giving State and local
governments flexibility to fund other energy conserving
transportation projects.
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