OHIO OIL REFINERY
Michael Williams  /  Getty Images file
President Bush wants to build more oil refineries like this one in Lima, Ohio, saying no such plants have been built nationwide in the last 30 years.
msnbc.com staff and news service reports
updated 4/28/2005 7:22:46 AM ET 2005-04-28T11:22:46

Confronting growing concerns over high energy prices, President Bush on Wednesday unveiled controversial plans to spur construction of new nuclear power plants, provide incentives to buy diesel vehicles and most novel of all: use some old military bases for oil refineries.

"A secure energy future for America must include nuclear power ... and expanding oil refineries," Bush added, saying that technology is making the nuclear and oil industries safer and cleaner.

"Technology is the ticket, is this nation's ticket to greater energy independence," he told the audience, citing as an example the smaller rigs needed today to drill in a place like the Arctic National Wildlife Refuge, a federal area that Congress is considering opening.

The president spelled out the plans in a speech at a small business conference, saying he ordered federal agencies to "simplify the permitting process for such construction" at retired bases.

‘Time ... to start building again’
Bush said that France has built 58 nuclear plants since the 1970s, the last time a plant was ordered here, and today France gets more than 78 percent of its electricity from nuclear power. “It’s time for America to start building again,” he said.

But while industry was on board with the proposals, the nuclear and oil refinery ideas face a "not in my backyard" resistance over environmental and health concerns.

The president’s proposals were outlined earlier by senior White House officials. Some of the highlights:

Oil refineries. The Energy Department is being ordered to step up discussions with communities near some former military bases to try to get refineries built. A new refinery has not been built in the United States in nearly three decades, and a refining shortage has been cited as one factor behind high gasoline prices.

Nuclear power.Congress is being asked to provide a “risk insurance” plan to insulate the nuclear industry against regulatory delays if they build new nuclear power plants.

Liquefied natural gas. Bush endorses giving federal regulators final say over the location of liquefied natural gas import terminals. LNG terminals take compressed, supercold natural gas shipped from overseas and warm it into usable energy. Only four such terminals exist in the United States amid increasing demand for natural gas.

Diesel vehicles. Bush wants to add newer, cleaner diesel vehicles to his proposal for $2.5 billion in tax credits over 10 years to buyers of high-mileage vehicles. 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. Hybrid buyers now get a $2,000 credit but that is set to expire.

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Not short-term relief
White House officials earlier acknowledged the proposals were not expected to provide any short-term relief from soaring gasoline and oil prices, but rather are designed to demonstrate how technology can be used to encourage more energy production from diverse sources.

It was Bush’s second speech on energy in a week. The increased attention reflects the growing concern in the White House over potential political damage from high energy prices that are beginning to affect economic growth as well as the president’s approval rating.

A Washington Post-ABC News poll showed that less than half of Americans support the way the president is handling energy policy. Bush met Saudi Crown Prince Abdullah at his Texas ranch on Monday but reached no agreement that would lower gasoline prices in the near term.

Energy map of AmericaAs he did last week, Bush called on Congress to give him an energy bill by August. The House has passed a version, while the Senate will begin debate next month. Administration officials want to work with congressional leaders to include Bush’s proposals.

Sen. 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.

Environmentalists, however, were not impressed with the president's speech.

"At a time when oil companies are making record profits, the federal government does not need to subsidize the construction of new refineries," David Hamilton, director of the Sierra Club's global warming program, said in a statement. "The current lack of refinery capacity is the result of a conscious decision by the oil industry in the 1990s to limit the supply to increase profits."

Nuclear background
On nuclear power, Bush noted that there has not been a new commercial nuclear power plant ordered in the United States since 1973.

Nuclear power accounts for about 20 percent 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 directed the Energy Department to develop a federal “risk insurance” plan that would kick in if there were lengthy delays in licensing a new reactor. Administration officials acknowledged such a program would need congressional action and said they could not speculate on its cost.

LNG background
As for LNG terminal projects, they 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 at a time when a dozen or more such facilities may be built along the U.S. coast.

The critics say they fear that federal control over locating LNG import terminals will lead to facilities being put in populated areas where communities fear they are unsafe and might become terrorist targets.

A senior official said there are 32 proposals to build new terminals, and Bush’s proposal would “provide some regulatory certainty” in order to get them built. Rules on the terminals vary from state to state, and California, for example, has not wanted to cede state authority.

The Associated Press and Reuters contributed to this report.

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