WASHINGTON -- President Bush, facing potential economic and political damage from soaring gas prices, offered proposals Wednesday to speed construction of oil refineries and boost sales of energy-efficient vehicles, among other proposals, said the Associated Press.
Bush outlined his initiatives in his second energy speech in a week, reflecting growing concern in the White House that high energy prices are beginning to slow economic growth and undercut the president's approval rating. Speaking to small business leaders, Bush lamented that he was powerless [image-nocss] to cut gas prices. "I wish I could," he said. "If I could, I would."
(Click herefor a transcript of the president's speech; President Bush will hold a press conference during prime time tonight, and he is expected to talk about energy issues.)
"This problem did not develop overnight and it's not going to be fixed overnight. But it's now time to fix it," he said. Bush said the problem is that energy supplies are not growing fast enough to meet the growing demand in the United States and in other countries.
"We've got a fundamental question we've got to face here in America," Bush said. "Do we want to continue to grow more dependent on other nations to meet our energy needs? Or, do we need to do what is necessary to achieve greater control of our economic destiny?"
Bush urged using closed military bases as sites for new oil refineries. The U.S. Department of Energy is being ordered to step up discussions with communities near such bases to try to get refineries built. He said the United States has not built a new oil refinery since the 1970s. A shortage of U.S. refining capacity has been blamed in part for the high gasoline prices, most recently by Saudi Arabia's Crown Prince Abdullah at a meeting this week.
The president also called on Congress to provide a "risk insurance" plan to insulate the nuclear industry against regulatory delays if it builds new nuclear power plants. America has not ordered a new nuclear power plant since the 1970s. "It's time for America to start building again," he said. Nuclear power accounts for about 20% of the country's electricity. Some utilities have expressed interest in building a new reactor, perhaps as early as 2010, but want assurance of a smooth regulatory process to get financing. To address their concern, the president is directing the Energy Department to develop a federal risk insurance plan that would kick in if there were lengthy delays in licensing a new reactor. Such a program would need congressional action, and White House officials would not speculate on its cost.
And he endorsed giving federal regulators final say over the location of liquefied natural gas (LNG) import terminals. LNG terminal projects have been stymied in some regions by local opposition, even though the need for more LNG imports has been widely accepted. Bush's support for giving the federal government clear authority in locating LNG terminals comes after the House included such a provision in the energy bill it passed last week. Some lawmakers strongly opposed the measure, arguing it would deprive states and communities of a say in locating LNG import terminals, even in heavily populated areas.
The president's call for a tax credit for gas-electric hybrid automobiles and for use of clean diesel is similar to a proposal in his budget earlier this year. The hybrid tax break was left out of the energy bill passed by the House last week. Such a credit would provide $2.5 billion in tax incentives over 10 years, White House officials said. Consumers would get a credit, up to $4,000, depending on the level of a vehicle's fuel efficiency, if they purchase a hybrid or clean-diesel vehicle.
As he did last week, the president called on Congress to give him an energy bill by this summer.
Senator Pete Domenici (R-N.M.), who is trying to put together an energy package that can pass the Senate, said he welcomed some of the president's proposals. He is "making it clear that energy remains a top priority of this president," Domenici said in a statement.
Senate Democratic leader Harry Reid called Bush's initiatives "little more than half measures and wrongheaded policies that will do nothing to address the current energy crisis or break the stranglehold that foreign oil has on our nation." He said Senate Democrats will offer a much larger package of tax incentivesdouble the $8 billion approved by the Houseand funnel more of the money to renewable energy sources and energy efficiency measures.
Meanwhile, Saudi Arabia's Crown Prince Abdullah on Tuesday said the kingdom will host a meeting in Riyadh during the fourth quarter to discuss oil and other energy issues between oil producing and consuming nations, reported Reuters.
Speaking at a dinner hosted by the U.S.-Saudi Arabian Business Council, the prince said the meeting was necessary because of the great importance we attach to the stability of the world energy markets and the contribution of these markets to world economic growth.
Abdullah said that at the upcoming meeting producers and consumers can discuss with depth and transparency the [energy] issues at hand.
He did not give a date for the meeting.
He also encouraged foreign investment in several Saudi sectors, including petrochemicals and electricity. But he did not ask for foreign investment in the kingdom's oil sector.
The prince on Monday met with Bush at his ranch in Crawford, Texas, where Abdullah provided details on the kingdom's plan to invest $50 billion to boost Saudi oil production capacity in the years ahead.
(Click here to read a joint statement by Bush and Abdullah).
Big oil companies would like Saudi Arabia to open its oil sector to foreign investment particularly in exploration and production. But in his speech the prince did not specifically invite foreign oil companies to be a part of the kingdom's new oil investment plan.
ExxonMobil CEO Lee Raymond sat next to Abdullah during the dinner.
Saudi Arabia is the world's largest oil exporter and a major supplier to the United States, which must import more than half of the 21 million barrels of oil it consumes each day. Bilateral trade between the United States and Saudi Arabia has increased from $160 million in 1970 to more than $26 billion last year, according to Saudi officials. The United States is the largest investor in Saudi Arabia, with 360 joint venture projects that have capital investment of more than $20 billion.
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