NYT: "President Offers Plan to Promote Oil Exploration" (Part 2 of 3)
January 30, 2001 Single-Page Format
(Page 2 of 3)
Mr. Bush's 10-year, $7.1 billion energy policy focuses mainly on oil and gas development, not the shortage of power generation and bottlenecks in distribution that have contributed to the California crisis. He wants to offer tax incentives to promote domestic oil production, as well as ease restrictions on drilling for oil and natural gas in parts of the 1.5 million- acre Alaskan refuge. Fully exploiting Alaskan reserves would probably require building a pipeline to ferry natural gas to mainland markets.
Those steps would do little to relieve the acute shortage of electricity that has forced California to issue its highest electricity alerts for two weeks running, warning that power might be cut off at any moment to selected parts of the state.
In an interview today, Mr. Bush's chief economic adviser, Lawrence B. Lindsey, also described a series of short- and medium-term steps that he said the administration could "encourage and help states to take."
Acting on requests from California and other states hit by high prices and energy shortages, he said the Bush administration could issue pollution waivers that "would allow older plants to come on stream" in peak periods. Such plants in California now pay fines when they operate, adding to the financial burden on utilities, which cannot pass the higher production costs on to consumers.
Power generating companies are staunch opponents of the 1990 Clean Air Act amendments, signed into law by Mr. Bush's father. The law sets deadlines for every city to meet health standards for air quality, though it gives states some flexibility in carrying out the standards. California has some of the nation's strictest air pollution control measures.
So far, California has not requested federal easing of environmental law, and Gov. Gray Davis has said that the state can extract itself from its electricity debacle without abandoning clean air targets.
But other states are seen as eager to allow some older, coal-powered plants to run for a longer time and might be eager to take advantage of a more flexible federal approach.
Mr. Lindsey also spoke of constructing new, higher-capacity transmission lines. "The governors in Utah and Wyoming tell me that they have excess power now, but they can't get the electricity to California," he said. Such construction, of course, is also likely to run into opposition from those who oppose the building of new lines. Similarly, gas turbine power could be increased in California, he said, but only with the construction of new gas pipelines.
"Every idea is a tradeoff," Mr. Lindsey said, noting that the current federal requirements that out-of- state utilities sell more power to California "is causing problems now in Arizona and Oregon."
Bush administration officials have not offered many concrete proposals to help California secure electricity supplies. They have argued that the problem stems from the state's botched effort at deregulation and that the solution lies within the state, where Governor Davis and the legislature are considering proposals to relieve the debt burden of utilities, to make consumers pay more and to let the state government arrange long- term purchases of power from independent generating companies.
Mr. Lindsey noted today that higher prices to consumers "would certainly encourage conservation." But he said that was a state decision. Moreover, Governor Davis fears that big increases in the retail price of electricity could prove politically disastrous for him.
(continued in the next post)
nytimes.com |
