Bush to propose energy measures

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President Bush today will propose several energy initiatives, including increasing the nation's oil refinery capacity and making it easier to build nuclear power plants, despite his first-term failure to get Congress to pass his original energy bill.

The president will deliver a speech this afternoon that will "talk about several new measures that will help us address the root causes of our energy situation," a senior administration official said last night on the condition of anonymity.

Mr. Bush will call for gasoline refineries to be built on closed military bases, reducing the need to clean up the sites to meet environmental standards, the official said.

"The idea behind the president's proposal, with respect to refining capacity, is to look at these closed military sites ... where jobs have been lost in the past and where many of these sites, frankly, are waiting cleanup," the senior administration official said.

The official said the proposals do not change Mr. Bush's commitment to his energy bill, which has been blocked by Democrats for years over provisions to drill in the Arctic National Wildlife Refuge and to limit lawsuits against makers of the fuel additive methyl tertiary-butyl ether (MTBE).

Federal and state environmental regulations have made it difficult for companies to open new refineries, and none has been built in the United States since the 1970s. One company in Arizona has been weaving through the permit process since 1999 and still has many more rounds of regulatory hearings and approvals.

The domestic oil industry blames lack of refining capacity for the recent spike in gas prices, a view Crown Prince Abdullah of Saudi Arabia shared with Mr. Bush in his visit to the president's Texas ranch this week.

The Bush administration will work with states and local communities to try to reduce the red tape in the permitting process.

"What the president will do is ask the federal agencies to work with states and local communities to explore opportunities for that and try to identify ways we can get new refinery expansion in this country," the administration official said.

Mr. Bush also will call for the Department of Energy to develop a federal insurance program that would compensate companies that must go through the lengthy permit process to build nuclear power plants. The last permit issued for a nuclear power plant was in 1973, and it did not go on line until the early 1990s.

The insurance, which would have to be approved by Congress, would "mitigate the cost of an unforeseeable delay on the back end" of the permit process.

"It would generally be an insurance commitment on behalf of the government to the project sponsors that would have to be backed up with real dollars," said the administration official, who would not speculate on how much that program might cost.

Mr. Bush also will propose $2.5 billion in tax incentives over 10 years to consumers for choosing to buy hybrid or clean diesel vehicles. The House did not include the provision in a bill it passed last week.

The president also will urge Congress to give the federal government the power to trump state and local government regulations on authorizing liquefied natural gas terminals.