Gas Prices on the Rise: President Bush Counting on Legislation to Reduce Foreign Dependancy

Last Wednesday, President Bush gave his second energy related speech of the week. He announced new plans to combat the energy crisis and increasing gasoline prices. When asked about the rising gas prices, the president said there was nothing he could do to lower the cost. “I wish I could,” he stated. He has five new proposals which he expects will reduce American dependency on foreign oil. ” [Foreign dependency] is a tax our citizens pay every day in higher gasoline prices and higher costs to heat and cool their homes. It’s a tax on jobs and a tax that is increasing every year,” Bush informed the Small Business Administration conference in Washington D.C. The Energy Department reports that the U.S. burns 20.5 million barrels of oil every day- about 60 percent of these barrels are imported. One of his new plans is to build oil refineries on old U.S. military bases. He plans to call on federal agencies to work with state and local communities to promote refinery expansion. President Bush is also looking into the possibilities of nuclear power. He calls on the Department of Energy to “reduce uncertainty” surrounding nuclear power. “A secure energy future for America must include more nuclear power,” he stated. Fears from the 1970’s and 1980’s about nuclear power still hold for many. A “risk insurance” may be instated which would ease investor worries. According to CNN reporters, administration is not yet prepared to discuss how much the tax will cost, or where the money will come from. Nuclear power currently accounts for about 20 percent of U.S. electricity production. Other proposals included a call to the Federal Energy Regulatory Commission to locate and place a liquefied gas terminal which the administration believes will increase the supply of natural gas, thus dropping prices. There are currently four import facilities, located in Massachusetts, Maryland, Georgia, and Louisiana. 32 more liquid natural gas imports have been proposed. There is still no plan to raise the S.U.V. emission standards which were lowered during President Bush’s first term. The president also proposed to give $2.5 billion in tax breaks to hybrid, fuel cell, and other new clean diesel technology vehicle owners. He briefly touched on expanding international cooperation in cleaner and more efficient methods. The House passed a new energy bill recently which will give federal compensation to private companies who have invested in oil refinery sites which cant be developed. According to the Associated Press, this means that if a permit is denied for any reason, even through federal government action (like the Environmental Protection Agency), the company that leased the property can request that the Interior department to authorize repurchase of the site. Brian Kennedy of the House Resources Committee supports the plan, saying “If the federal government turns a lease into a lemon, in essence, producers are entitled to get their money back for the lemon they paid for.” Besides the cost of the original lease, these producers will also be reimbursed for any other expenses, such as drilling costs, and environmental and seismic studies costs.” Democrats fear the passing of this bill would force taxpayers to foot at least a billion dollar tab. Peter Douglas, director of the California Costal Commission called this payback a “rip-off of the public treasury.” California, Florida, and Montana will see the most action if this bill passes. There are about 38,000 leases in the U.S. and the majority of them are off the coast. Some estimate that only a small amount of these cannot be developed, but the cost is currently unknown. Currently, the bill sits with the Senate, who are currently working on their version of the bill. At the energy meeting, President Bush urged the senate to have the bill on his desk by August.