Bush Calls For Energy Conservation

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The New York Sun

WASHINGTON – President Bush yesterday urged Americans to drive less and embrace conservation more in the wake of Hurricanes Katrina and Rita, and he said he would work with Congress to enact incentives for energy production and refinery construction.


The president also said he was directing federal agencies to take steps to reduce energy consumption and that he would release oil from the Strategic Petroleum Reserve as needed to ease the shortages and price spikes caused by the two hurricanes.


In Congress, Republican leaders announced plans to introduce legislation to give new tax breaks to energy companies and provide other incentives left out of the big energy bill Mr. Bush signed into law in August.


The developments underscored the extent to which Katrina and Rita have reconfigured the legislative agendas of both the White House and Congress, and the breadth of their effect on a domestic petroleum market that has become increasingly sensitive to supply disruptions.


In remarks reminiscent of President Carter’s 1977 appeal to Americans to turn down their thermostats, Mr. Bush said everyone had a role to play in responding to the back-to-back storms that have hampered offshore oil production, refinery operations, and fuel distribution in the Gulf Coast region.


“We can all pitch in … by being better conservers of energy,” Mr. Bush said after hearing a briefing at the Department of Energy. “I mean, people just need to recognize that the storms have caused disruption and that if they’re able to maybe not drive …on a trip that’s not essential, that would be helpful.”


The president said he was ordering executive branch agencies to do the same. Federal employees were being told to curtail non-essential travel, increase use of carpools and mass transit, and reduce electricity use during peak hours, he said, “as a way for the federal government to lead when it comes to conservation.”


Asked if Mr. Bush – who today begins his seventh trip to the Gulf Coast since Hurricane Katrina struck in late August – would curtail his own travel to the area, a White House spokesman, Scott McClellan, said “it’s important for the president of the United States to travel to the region and get firsthand accounts of the operations and to provide comfort and support to those who have been affected. … That’s an important responsibility of the president of the United States.”


Mr. Bush announced other steps to help ease storm-related supply shortfalls. He said the government would loan crude oil drawn from the underground Strategic Petroleum Reserve to refiners who needed it, a practice that began after Katrina.


The White House said the Department of Homeland Security would extend a waiver, begun after Hurricane Katrina, of a federal law called the Jones Act so that foreign flagships could temporarily transport fuel from one American port to another. The Environmental Protection Agency was extending waivers relaxing gasoline-blending rules and diesel-fuel restrictions.


Mr. Bush said the storms had called particular attention to the need to increase refining capacity in America. He noted that no new refineries had been built since the 1970s, and said excessive federal regulation had discouraged oil companies from expanding existing plants.


On Capitol Hill, Republican leaders said they were moving swiftly to write legislation aimed at spurring refinery construction and expansion.


In addition to a lack of new construction, refining capacity has been affected by other factors. Years of heavy financial losses and a wave of mergers have wiped out many refineries, leaving the industry with only 148 fuel making plants today, down from a peak of 324 refineries in 1981.


In the last decade, the industry has largely offset the lost production from refinery closures by expanding existing plants. At the same time, refiners have spent money in recent years to comply with more stringent environmental regulations. They have not increased production enough to keep up with the swelling demand for gasoline, diesel, jet fuel, and other petroleum products.


The New York Sun

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