Patrick Crow
OGJ Online
US Vice-President Al Gore Tuesday proposed a long-term, $75 billion program intended to reduce US dependence on imported oil, lower pollution and purported global warming, and ensure against electricity shortfalls.
For the gas industry, the plan would extend deepwater royalty relief for marginal fields in the Gulf of Mexico. That program will expire in November, unless renewed.
Gore, the apparent Democratic presidential candidate, outlined a "National Energy Security and Environment Trust Fund" that would provide tax breaks and other financial incentives for changes in energy and environmental practices.
The vice-president is planning an announcement today on additional incentives for consumers to buy more energy-efficient and environmentally sound products. On Thursday, he will disclose mass transit incentives for cities.
Gore outlined five energy policy goals: reduce energy use and pollution, lower dependence on imported oil, protect children against the threat of pollution, reduce the threat of global warming, and increase reliability of the power grid.
Elements
Gore's proposal would extend and modify the tax credit for producing electricity from renewable and alternative sources. It would double the existing tax credits for the operating costs of wind, open and closed-loop biomass, biomass co-firing, and landfill methane electrical generation.
Electric generation from landfill methane would be eligible for a credit for the first 10 years of production if the facilities are placed in service after Dec. 31, 2000, and before Jan. 1, 2006.
The Gore plan would allow accelerated depreciation for distributed power, the generation of electricity from units built next to businesses, factories, and residential rental properties. And it would set standards and upgrade infrastructure to improve the reliability of the electricity system.
Gore's plan also would "develop new market-based solutions to address the challenges to our environment and energy security posed by old power plants, transmission facilities, and large industrial energy users, with a goal of establishing substantial reductions in the environmental impact of large industries.
"The legislation will offer a menu of financial mechanisms such as tax incentives, loans, grants, bonds, or other financial instruments to those power plants and industries that come forward with projects that promise to dramatically reduce climate and health-threatening pollution."
The Gore program would also expand federal investment in the Small Business Innovation Research Program and the Advance Technology Program, which give businesses incentives to develop energy-efficient and environmental technologies.
Reactions
The Competitive Enterprise Institute said Gore's plan is "wrapped in the rhetoric of lower energy prices and market-based solutions.
"But after peeling away the layers of verbal camouflage, the reality is...that Gore's plan is about government control of energy use, lower consumption, and higher prices."
CEI said, "The Clinton-Gore administration has spent 7 years working to reduce energy supplies and raise energy costs. And they got their wish with $2/gal gasoline and looming electricity shortages this summer.
�Now Gore wants to take this plan one step further by inserting government control and interference in every aspect of energy production and consumption."
The conservative Cato Institute said Gore's energy plan is "nothing more than an elaborate repackaging of long-standing programs that have demonstrably failed to have any impact on the energy economy.
"Over the past 20 years, federal and state governments have spent more than $40 billion to subsidize renewable energy and conservation. Despite a wide array of subsidies, preferences, and mandatory purchase requirements, environmentally friendly renewable energy still constitutes only 2% of the electricity market and 0% of the transportation market."
API stance
Without mentioning the Gore program, the American Petroleum Institute offered some energy policy principles Tuesday.
It said, "The oil and natural gas industry believes it is important that there be at least four essential components to a national energy policy for the 21st century. If adopted, they would enable the industry to continue to provide a reliable and affordable supply of gasoline, diesel fuel, heating oil, and natural gas to American families and businesses."
API said companies should be allowed greater access to domestic reserves of oil and gas that are currently off limits: "We need a level playing field so we can reduce our reliance on foreign oil, currently at 55% and rising.�
It said the US should lift unilateral sanctions it has imposed on certain countries.
"These sanctions are preventing American producers from drilling for oil and natural gas in some overseas oil fields," said API. "Expanded access would create a greater range of choices for American consumers."
API said the government should coordinate implementation of environmental rules and regulations. "Smoother integration of regulations might have prevented the sharply higher gasoline prices that disrupted household budgets in the Midwest this summer."
And it said the US should expedite permitting for modernizing facilities for the manufacture and delivery of gasoline, diesel fuel, natural gas, and heating oil. "Unreasonable delays in governmental approval for the construction of new pipelines or improvements to refineries slow down deliveries at a time of high demand for oil and natural gas."
