Conscious Choice: Bush's Energy Plan: The Wrong Choice for America

July 2001 | News of the Earth

Bush's Energy Plan: The Wrong Choice for America

by Dave Aftandilian

Here’s the American energy gospel according to President George W. Bush: "If we fail to act, this great country could face a darker future, a future that is unfortunately being previewed in rising prices at the gas pump and rolling blackouts in the great state of California.... To protect the environment, to meet our growing energy needs, to improve our quality of life, America needs an energy plan that faces up to our energy challenges and meets them. Vice-President Cheney and many members of my cabinet spent months analyzing our problems and seeking solutions. The result is a comprehensive series of more than 100 recommendations that light the way to a brighter future through energy that is abundant and reliable, cleaner and more affordable."

That gloomy portrayal of a looming national energy crisis, and the need for a plan to head it off, was painted by President Bush in a speech he gave on May 17 to mark the official release of his administration’s national energy plan, "Reliable, Affordable, and Environmentally Sound Energy for America’s Future: Report of the National Energy Policy Development Group." You can read the plan in PDF format at www.whitehouse.gov/energy.

An editorial in the June issue of The Progressive eloquently summed up the Bush energy plan as "a get-it-fast, get-it-while-it-lasts approach that only a government of, by, and for the energy companies could propose." Bill Meadows, executive director of the Wilderness Society, called it "an outdated, drill America first plan." And House Minority Leader Dick Gephardt (D-MO) said the plan is "the wrong choice for America.... It focuses on drilling and production at the expense of our environment and conservation. And it does nothing to help people who need relief right now."

The Energy Crisis That Wasn’t

Before examining the specifics of the Bush energy plan, let’s get one thing straight: there is no credible evidence that the United States is currently facing a nationwide energy crisis. In an editorial in the Washington Post, former president Jimmy Carter explains:

"No energy crisis exists now that equates in any way with those we faced in 1973 and 1979. World supplies are adequate and reasonably stable, price fluctuations are cyclical, reserves are plentiful, and automobiles aren’t waiting in lines at service stations. Exaggerated claims [like Bush’s] seem designed to promote some long-frustrated ambitions of the oil industry at the expense of environmental quality.... [S]ome officials are using misinformation and scare tactics to justify such environmental atrocities as drilling in the Arctic National Wildlife Refuge."

Consider the following claim in the "Overview" portion of the Bush energy plan: "A fundamental imbalance between supply and demand defines our nation’s energy crisis.... [I]f energy production increases at the same rate as during the last decade our projected energy needs will far outstrip expected levels of production." What that statement overlooks, according to New Yorker economics writer James Surowiecki, is the key regulator of the market — price. "Past energy crises have shown that price makes a huge difference in the way people use energy, just as it affects the way they use everything else," Surowiecki writes. "In the sixties, U.S. energy consumption was growing at 8 percent every year. Between 1974 and 1985 [after a sharp spike in oil prices in the 1970s], it grew just 0.15 percent per year. People adjusted. Price also has a big impact on the supply side. Raise the price of oil and gas, and companies start figuring out how to get and sell more of it. They’re not going to sit idly by while there are profits to be had. This year, energy companies expect to put forty-one billion dollars into natural-gas exploration. They’re increasing spending on oil and gas exploration by 25 percent. And the number of new gas rigs is at an all-time peak."

But what about California? Don’t they have an energy crisis that might spread to the rest of the United States? Yes and no. A number of factors contributed to the rolling blackouts, brownouts, and soaring electricity rates that many California residents have endured since December, many of them specific to that state. First and foremost was California’s decision in 1996 to deregulate electricity production — a move that has since turned out to be "one of the most costly public policy mistakes ever made," according to the San Francisco Chronicle. In an article for The Nation entitled "California’s Deregulation Disaster" (February 12, 2001), Harvey Wasserman argues that California’s three biggest electric utilities — Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison — made some crucial mistakes in the deregulation legislation they successfully lobbied state lawmakers to approve. Assuming that there would be a surplus of cheap wholesale electricity, these utilities sold off most of their power plants to private companies, sticking California taxpayers with $20 to $28.5 billion in "stranded costs" to pay off the bad investments that the utilities had made in obsolete generators, mainly nuclear power plants, and freezing retail prices for electricity at what then seemed like high levels until those obsolete plants were paid off.

Ralph Cavanagh, codirector of Natural Resources Defense Council’s energy program, takes up the California story from there. Natural gas prices rose because of a prolonged slowdown in exploration and storage of surplus gas due to low commodity prices, coupled with reduced pipeline capacity in the Southwest due to an explosion last summer. The much costlier natural gas, together with higher-priced hydropower from the Northwest (production had been reduced due to low rainfall), an overstressed power grid, and reduced investment in energy efficiency and generating capacity in the West over the past decade, resulted in much higher prices for electricity generation in California. But the energy utilities were not able to raise retail electricity prices because of the deregulation legislation they had demanded, and so are now claiming bankruptcy. (Let’s hope the electricity deregulation now well underway in Illinois goes more smoothly.)

Bush’s Energy Plan

Once you realize that there is no national energy crisis, Bush’s national energy plan begins to look a lot more like a cynical attempt to use scare tactics to ram oil drilling, coal mining, and nuclear power down American throats, bypassing critical environmental and public health safeguards along the way. As Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Project, puts it, "I think it’s pretty clear why the Bush-Cheney team is doing this. The only green they understand is the color of money, and this is payback time for their campaign contributors." For example, the Wall Street Journal noted that Houston-based Enron, the nation’s largest supplier of natural gas, contributed $1.3 million to the Bush campaign and inaugural fund and to the Republican National Committee. And the New York Times reported that shortly after nuclear energy industry executives traveled to the White House in March to lobby for nuclear power’s inclusion in the Bush energy plan, Vice-President Dick Cheney appeared on CNBC and discussed nuclear power as an alternative to dirtier fossil fuels.

As you might expect from an administration led by two former oil men, the Bush energy plan’s 105 recommendations lean heavily toward fossil fuel production and transmission, both domestically and abroad, coupled with a puzzling commitment to renewing the essentially moribund (with good reason) nuclear power industry. The plan sets aside $2 billion over the next ten years for the development of "clean coal" technologies, for instance, despite the fact that coal is the most heavily polluting source of energy we have, with proven dangers to the environment and public health (see "News of the Earth," February 2001, for details). Permits for pipelines and power plants are to be expedited under the Bush energy plan no matter the environmental consequences, and the Arctic National Wildlife Refuge (ANWR) and other public lands and waters managed by the Interior Department, both on the continent and offshore, are to be opened for oil and natural gas exploration and development; "economic incentives for environmentally sound offshore oil and gas development" are also to be considered "where warranted by specific circumstances." An Executive Order from Bush will require every federal agency to prepare a detailed energy impact statement for any proposed action that might "significantly and adversely affect energy supplies." And the "safe expansion" of nuclear energy is to be encouraged through the establishment of a national nuclear waste depository, streamlining licensing of nuclear power plants, and reconsideration of the U.S. policy against reprocessing nuclear waste into a potential power source.

Although there are some sound suggestions for increasing energy efficiency and renewable energy research in the Bush energy plan, in general these options are seriously underexplored and underfunded relative to fossil fuels. This shouldn’t come as a huge surprise, since Bush slashed funding for these areas in his proposed budget for 2002 — renewable energy research and development, for instance, would be reduced by almost half in Bush’s budget, with solar research funding dropping to $42.9 million from $92.7 million, and wind to $20.5 million from $39.6 million. Energy efficiency programs would take a hit of 27 percent overall, with cuts of more than 50 percent to some specific items. And the Bush administration recently rolled back a Clinton decision to require central air conditioners to be 30 percent more efficient, opting instead for a 20 percent efficiency gain, despite the fact that Goodman Manufacturing, the second largest U.S. producer of central air conditioners, supported the stricter standard.

The Bush plan does propose that Congress consider a tax credit for the purchase of hybrid/fuel cell vehicles from 2002 to 2007, as well as new or renewed tax incentives for combined heat and power generation, home solar equipment purchases, and wind and biomass energy development. Corporate Average Fuel Efficiency (CAFE) standards for automobiles, which the Republican-controlled Congress has frozen for years, are to be reviewed, and new guidelines and technologies are to be developed for reducing truck idling emissions at truck stops. Fuel cell and other clean buses are to be funded through the TEA-21 transportation legislation, and the Department of Energy’s "Energy Star" program is to be expanded both to more types of buildings and to more appliances. Incomes from leasing ANWR for oil exploration and development are to be used for land conservation and renewable energy research, and funding for "performance-based and cost-shared" renewable energy and efficiency research is to be increased.

So what’s wrong with all this? Well, for one thing, almost no money — aside from revenues generated from oil drilling in ANWR — is set aside for solar energy research, despite the fact that solar is one of the cleanest (and, in certain parts of the United States, the most abundant) power sources currently known. No mention is made of a recent report based on three years of work by five national labs that found that a government-led energy efficiency program emphasizing research and incentives could reduce growth in electricity demand by 20 to 47 percent — the equivalent of between 265 and 610 big 300-megawatt power plants. Energy efficiency in general is given short shrift, despite the fact that it is the only aspect of the plan that could be put in place fast enough to relieve energy crunches this summer. Regional differences in prospects and challenges for power generation are ignored in favor of a one-size-fits-all approach. Coal and nuclear are seen as the best short-term sources of power, despite the heavy pollution produced by coal, the danger (think Three Mile Island and Chernobyl) and high cost of nuclear power production, and the risks that plutonium produced by reprocessing spent nuclear fuel could be used to make nuclear bombs by rogue nations.

A Brighter Way

Thankfully, we do have some alternatives. The Democrats have proposed their own energy plan that focuses much more on energy efficiency and renewable energy, as well as responsible production increases, which do not involve drilling in the Arctic National Wildlife Refuge. There’s a bill in the U.S. Senate, sponsored by Diane Feinstein (D-CA), Olympia Snowe (R-ME), Charles Schumer (D-NY), and Susan Collins (R-ME) that would close the loophole for SUVs and other light trucks in the CAFE standards, forcing them to meet the same 27.5 mpg standard as other small passenger vehicles; this would save Americans $27 billion at the gas pump, reduce global-warming carbon dioxide emissions by 240 million metric tons every year, and save 1 million barrels of oil every day — three times more oil than we could get from drilling the Arctic National Wildlife Refuge, according to the Sierra Club. Raising this standard to 39 mpg over the next decade would do even more to conserve gasoline and lessen the bite the gas pump takes out of our paychecks, saving 51 billion barrels of oil over the next fifty years. Even an efficiency measure as simple as requiring that replacement tires on cars match the quality of tires on new cars would save 5.4 billion barrels of oil over the next 50 years, according to the Natural Resources Defense Council’s energy plan.

Thinking longer term, it’s clear that we need a transition to renewable energy, which pollutes far less and which we could obtain domestically. Instead of using coal for electricity generation during the transition period, as the Bush plan proposes, cleaner-burning natural gas would be a much better choice. Wind turbines can also be built in as little as six months, and now that wind power is almost as cheap as power produced from fossil fuels, we should be installing wind power plants wherever sufficient wind resources can be harvested. We should also dramatically increase spending on renewable energy research and development, and provide a market for renewable energy by establishing national and/or state-level portfolio standards requiring power companies to purchase a certain percentage of their power from renewable sources. For more bright ideas like these for the Midwest, I encourage you to check out the "Repowering the Midwest" report (see last month’s "News of the Earth," and visit www.repowermidwest.org.

Finally, we as Americans need to reduce our energy gluttony. Even though we only have 5 percent of the world’s population, we are responsible for almost 25 percent of the world’s oil consumption. Per capita, Americans consume more energy than any other people in any other country in the world. Yet Vice-President Cheney denigrated conservation in a recent speech as "a personal virtue," not worthy of national consideration, and Bush spokesman Ari Fleischer responded to a question in a press conference about whether American lifestyles are part of our energy problem with: "That’s a big no. The president believes that it’s an American way of life, and that it should be the goal of policy-makers to protect the American way of life. The American way of life is a blessed one. And we have a bounty of resources in this country. What we need to do is make certain that we’re able to get those resources in an efficient way ... into the hands of consumers so they can make the choices that they want to make as they live their lives day to day." Given that level of clueless hubris in the Bush administration, it’s a wonder the president’s energy plan isn’t worse than it is.

Resources

Bush Energy Plan

Natural Resources Defense Council

Repowering the Midwest

Sierra Club’s Energy Page

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