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June 10, 1992


            PRESIDENT BUSH'S NATIONAL ENERGY STRATEGY
                                
                                
     "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

     "When our administration developed our national energy
     strategy, three principles guided our policy:  reducing our
     dependence on foreign oil, protecting our environment, and
     promoting economic growth."
     
                                        President George Bush
                                        October 25, 1991

Summary

o    On February 20, 1991, President Bush released to the
     American people his National Energy Strategy (NES), a
     comprehensive strategy designed to increase America's energy
     security, enhance environmental quality, and fuel future
     economic growth.

o    In early March 1991, the President sent to Congress
     legislation to implement key aspects of his NES.  The
     Congress is currently considering energy legislation that is
     substantially modeled upon the President's National Energy
     Strategy.  Recently, energy bills have passed the Senate 94
     to 4 votes and the House 381 to 37 votes.

o    The President is pleased that the Senate and House of
     Representatives have made progress toward adopting a sound
     national energy policy.  The Senate and House energy bills
     would implement several key elements of the President's NES.
     By following the President's NES, they would make the United
     States less vulnerable to the economic damage resulting from
     excessive dependence on insecure foreign suppliers, through
     initiatives designed to promote energy efficiency and
     increase domestic production.  While there is much work to
     be done, the President believes the Senate and House bills
     form a welcome bipartisan basis for moving to final action
     in conference.


o    The President's National Energy Strategy builds upon a
     number of Bush Administration initiatives including the 1990
     revisions to the Clean Air Act, 1989 Natural Gas Wellhead
     Decontrol Legislation and incentives provided in the 1990
     budget agreement for domestic producers of renewable and
     fossil energy.

The President's National Energy Strategy

o    President Bush released his NES on February 20, 1991.  The
     NES is a comprehensive and balanced strategy for an energy
     future that is secure, efficient, and environmentally sound.
     The NES is designed to:

     --   Diversify U.S. sources of energy supplies;
     
     --   Increase efficiency and flexibility in energy
          consumption;
     
     --   Reduce the dependence of the U.S. economy on oil while
          increasing domestic oil production;
     
     --   Increase the use of natural gas, a domestically
          abundant source of clean energy;
     
     --   Increase the production and use of renewable energy
          resources;
     
     --   Increase the use of alternative transportation fuels;
     
     --   Encourage efficiency and competition in electricity
          generation and efficient use of electric power;
     
     --   Reduce U.S. emissions of greenhouse gases from
          projected levels;
     
     --   Improve air, land, and water quality by developing and
          using environmentally superior technology;
     
     --   Create jobs and promote economic growth; and

     --   Maintain U.S. preeminence in fundamental science and
          engineering research and accelerate commercialization
          of technologies developed through Federally funded
          research.





Increasing Energy Conservation and Efficiency

o    President Bush is committed to achieving greater efficiency
     in every element of energy production and use.  Greater
     energy efficiency can reduce energy costs to consumers,
     enhance environmental quality, maintain and enhance our
     standard of living, increase our freedom and energy
     security, and promote a strong economy.

o    The President has proposed over $330 million in the FY 93
     budget for energy conservation research and development,
     double the amount when he took office.  The following are
     examples of specific proposals in the President's NES to
     increase our energy efficiency.

Transportation:

o    Transportation efficiency is targeted by expanding efforts
     to develop advanced transportation technologies, such as
     more fuel efficient engines, electric vehicles, more
     intelligent-vehicle highway systems, and magnetic-levitation
     and other high speed transportation.  These advanced
     technologies hold the promise of significant energy savings
     in the transportation sector.

o    The NES also promotes efforts to accelerate scrappage of
     older, gas guzzling cars and increase use of public
     transportation and ridesharing by raising the limit on tax-
     free commuter subsidies that employers can give employees.

o    These and other measures directed at transportation are
     projected to save the equivalent of 3.0 million barrels of
     oil per day by the year 2010 without the harmful effects of
     higher taxes, increased regulations or oil import fees. Even
     though the number of passenger miles driven is estimated to
     increase 60% by 2010, the volume of gasoline purchased by
     consumers is projected to fall by 10%.

Electricity:

o    Analysts forecast that over 90 gigawatts (about 90 large
     power plants) will be needed over the next 10 years to meet
     increased electricity demand.  The President's NES will meet
     this increased demand by both increasing efficiency and
     expanding the range of fuels and technologies for
     electricity generation.




o    The President's NES will increase electricity efficiency and
     competition among suppliers by amending the Public Utility
     Holding Company Act to remove restrictions on electric
     generators who wish to build, own, and operate power
     facilities in more than one area, and by reforming the
     Public Utility Regulatory Policies Act to modify size and
     fuel use restrictions for small power producers.

o    The NES also supports State and utility efforts to invest in
     energy efficiency as an alternative to power plant additions
     and provides tax-free treatment of utility discounts on
     consumers' electricity bills for efficiency investments.  It
     will reduce Federal subsidies for the debt of Federal Power
     Marketing Administrations and expand access to electricity
     transmission for utility and non-utility wholesale buyers
     and sellers.

o    The electricity efficiency measures in the President's NES
     are projected to reduce electricity growth by over 10% in
     2010 and save consumers over $30 billion in electricity
     costs.

Residential and Commercial Building Conservation:

o    The NES targets residential and commercial buildings'
     efficiency by increasing Federal funding for R&D in building
     technologies.  This is to develop and encourage the use of
     cost-effective building efficiency standards.

o    The NES also encourages providers of home mortgages to
     consider energy efficiency ratings in their pending
     decisions with prospective home buyers and expands energy
     efficiency labeling programs to include certain other
     equipment, such as light bulbs.

Industry:

o    The NES will increase industrial energy efficiency by
     increasing research and development for industrial waste
     reduction and recycling, supporting the use of industrial
     energy audits at the state and local level, and modifying
     regulations that inhibit the use of waste minimization
     technologies.

o    Industrial output is expected to grow almost 80% by the year
     2010, but the United States is projected to use only 25%
     more energy to power its industrial facilities.



Federal Government:

o    President Bush has issued an Executive Order directing all
     Federal agencies to reduce overall energy consumption in
     Federal buildings 20% by the year 2000, and to reduce fuel
     consumption in Federal vehicles 10% by 1995.

o    President Bush has directed Federal agencies to maximize
     their purchases of alternative fuels vehicles.  Over 3,000
     such vehicles have already been purchased and are in use.


Securing Future Energy Supplies

o    The U.S. is part of an energy interdependent world, but U.S.
     vulnerability to supply disruptions must be reduced.  One of
     the objectives of the NES is to increase the environmentally
     sound production of domestic energy resources.  Initiatives
     in the NES will increase domestic oil production by up to
     3.8 million barrels per day in 2010, and increase
     economically recoverable resources by 25 to 70 billion
     barrels.  The NES also includes a major commitment to
     advanced energy technology through research and development
     initiatives for energy security.
     
Oil:

o    President Bush has led efforts to reform alternative minimum
     tax (AMT) as it applies to independent energy producers.
     President Bush has actively supported measures to remove
     serious disincentives to domestic production of oil and gas
     that exist in current tax law.  The President believes that
     reform of AMT is absolutely necessary to help revitalize the
     domestic oil and gas industry.

o    The NES establishes a new program of joint Federal/private
     investment in advanced oil recovery technology.  By 2010,
     advanced oil recovery technologies are projected to increase
     U.S. production by over 3 million barrels per day.

o    The President supports the expansion of worldwide strategic
     petroleum stocks available to offset future oil supply
     disruptions.






o    The President's NES encourages oil production in America by
     calling for the approval of access to the coastal plain of
     the Alaskan National Wildlife Refuge (ANWR) and some Outer
     Continental Shelf areas under strict environmental
     safeguards.  The President will continue to press Congress
     to allow access to ANWR.  The NES also supports an increase
     in the production of California heavy oil and access to
     export markets.

o    The NES supports the expansion of production capacity
     throughout the world and the Administration has initiated
     programs to achieve this end in the Western Hemisphere and
     in the former Soviet Union.

o    The President supports Federal royalty reductions for on-
     shore oil and gas producers.  The Administration is
     examining royalty reductions on off-shore production.

Natural Gas:

o    On March 6, 1992, President Bush announced steps to bring
     relief to the natural gas industry.  The Administration will
     remove regulatory barriers that impede the use of natural
     gas by electric utilities.  It will also encourage greater
     usage of natural gas vehicles by removing regulatory
     barriers to the sale of compressed natural gas for use in
     motor vehicles, and will issue proposed emission standards
     for natural gas vehicles that will allow them to compete on
     an equal basis with other vehicles.

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.  And, pursuant to the NES,
     the Federal Energy Regulatory Commission recently proposed
     regulatory reforms which will deregulate pipeline sales
     rates in competitive markets and reform gas pipeline rate
     designs.

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    NES recommendations relating to alternative fuels and
     electricity regulatory reform (PUHCA) will also
     substantially increase utilization of natural gas.

o    Initiatives in the NES are expected to increase natural gas
     consumption by almost 1 trillion cubic feet by the year
     2000.

Coal:

o    The President's NES promotes the use and exportation of
     clean coal by promoting clean coal technology and by
     creating favorable export markets for U.S. coal and coal-
     burning technologies.  The NES will clarify the
     applicability of the Clean Air Act to refurbished power
     plants, and pursue research and development on environmental
     protection during mining.

o    Initiatives in the NES will help the U.S. coal industry
     capture a major share of the growing international coal and
     coal technology markets, while at the same time improving
     our ability to more cleanly and efficiently utilize the
     large U.S. supplies of low cost coal.

o    The President supports full funding of the Five-Round Clean
     Coal Technology R&D program.  This Federal-industry $5
     billion cost-shared program is developing high efficiency,
     low-emission technology to meet the stringent air quality
     standards of the next decade.

Nuclear Power:

o    The NES proposes legislation which will preserve the nuclear
     power option to meet electricity needs by reforming and
     streamlining the nuclear plant licensing process.

o    The NES supports the renewal of licenses for existing
     nuclear plants, where this can be done safely and
     economically.  It also supports standardized designs for
     "next generation" power plants and accelerates research and
     development of "next generation" passively safe design
     nuclear reactors.

o    The NES contains initiatives to ensure progress on the
     management and disposal of nuclear waste.





Renewable and Alternative Energy:

o    The President's renewable energy research and development
     budget for FY 93 was increased to nearly $250 million, a
     more than 65% increase over the amount when he took office.

o    The NES 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 Department of
     Energy has teamed with industry to establish a joint
     research venture to make possible a new generation of
     batteries for electric vehicles.

o    The President's NES encourages hydropower projects by
     proposing legislation which would eliminate unwarranted
     Federal regulation and streamlining hydropower licensing
     projects.

o    The Department of Energy has begun to test new ways to
     produce ethanol at cost-competitive prices.  Increasing the
     use of ethanol in the transportation sector will make the
     United States less dependent on oil imports.

o    The Department of Energy completed construction of the Wind
     Energy Test Center in September 1991.  Advances in
     technology of wind as an energy source will enhance its
     chances of becoming a competitive resource for electricity
     in many areas of the country.  The President requested $22
     million for wind energy research and development in the FY
     93 Budget.

o    The Department of Energy has entered into a joint venture
     with private companies to develop a system that uses solar
     power to operate generators.  President Bush has requested
     $27 million in his FY 93 Budget for the research and
     development of solar energy.

o    The NES supports converting municipal solid waste to energy
     as part of a comprehensive waste management strategy.

o    The NES proposes to intensify international collaboration in
     fusion research to develop a demonstration plant by 2025 and
     a commercial plant that could cost-effectively supply power
     by 2040.

o    Electricity generation from renewable energy sources is
     projected to increase 16% by 2010 under the NES.


Energy and the Quality of Air, Land and Water

o    Coupled with the Clean Air Act Amendments that the President
     signed into law in 1990, the NES strives to enhance
     environmental quality by reducing sulphur dioxide emissions
     by 40%, nitrogen oxides by 30%, and volatile organic
     compounds emissions by 25% from projected levels in 2030.
     The NES will reduce the cost of achieving greater
     environmental benefits.

o    The NES, will reduce greenhouse gas emissions and
     demonstrate U.S. international leadership on this issue.  At
     the same time, ongoing Federal research aimed at reducing
     scientific uncertainty on the potential for global climate
     change, will provide an improved basis for future policy.




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