Washington group urges federal energy policy reforms

The US urgently needs a national strategy that better balances the realities of energy production and transmission with environmental and consumer concerns, the US Energy Association said Wednesday. The nongovernmental group, based in Washington, DC, is the US member committee of the World Energy Council.


By an OGJ Online Correspondent


WASHINGTON, DC, Feb. 21
�The US urgently needs a national strategy that better balances the realities of energy production and transmission with environmental and consumer concerns, the US Energy Association said Wednesday.

USEA, a nongovernmental group in Washington, DC, is the US member committee of the World Energy Council. It is an association of public and private energy related organizations, corporations, and government agencies.

It issued a report aimed at influencing the energy plan the George W. Bush administration is expected to propose, and energy legislation in Congress.

USEA said the nation needs to make a series of policy changes to ensure that consumers have an increasing supply of affordable energy, produced in a reliable and environmentally responsible manner.

Frank Murkowski (R-Alas.), the Senate Energy Committee chairman, is expected to introduce a comprehensive legislation to Congress next week. USEA members said it would likely incorporate many of their recommendations.

Richard Lawson, chairman of the USEA National Energy Policy Committee and former National Mining Association (NMA) president, said a strategy should examine "overly burdensome environmental regulations that prevent access to new energy sources."

He said other problems are "the adverse national security implications of rising oil imports; an energy infrastructure that is aging and increasingly overwhelmed by growing demand; a regulatory process that is often unfair and counter-productive; and a lack of foresight in developing new, more efficient energy technologies and alternative energy sources."

The report contained a series of policy recommendations, including easing restrictions on domestic production, streamlining approval of new power plants and transmission grids, offering incentives for new technologies such as clean-burning coal, easing taxes on US multi-national energy companies, and further deregulation in the electricity market.

Red Cavaney, American Petroleum Institute (API) president, said due to restrictions on land access, US oil and gas production has been essentially flat in the past 6 years, while demand has increased dramatically.

He said, "You need to be able to have access to federal lands ... and there's a series of regulations and permitting issues which have basically taken a lot of the most attractive reserves we have in oil and gas and held them off limits."

While he offered no predictions on the fate of Murkoswki's upcoming energy bill, Cavaney said, "There is going to be action along the issues related to national energy policy over the course of the next couple of years, because the US is operating at or near its maximum in most of the energy production areas.

"And given the forecast of increasing demand and the linkage between energy usage and economic growth, there's going to need to be some things done."

David Owens, executive vice-president of Edison Electric Institute (EEI), emphasized the need to upgrade the country's production and transmission infrastructure to keep up with growing demand.

He said, "Our electric transmission system is in significant need of being enhanced. It is a system that was designed to be a two-lane road, and it is now being used like an interstate highway."

Owens suggested the Federal Energy Regulatory Commission be given more power to approve the siting of new transmission capacity, which is often delayed by local governments. "The report strongly suggests that we need to expedite this process, consistent with what I understand Sen. Murkowski's bill will propose," Owens said.

He said adequate price incentives would spur construction of electricity generating capacity.

"The report recognizes that it is important to give the right kind of pricing signals to stimulate the production of new supply," Owens said. "It recognizes that if you are going to refurbish supply, it is very important that you give the right kind of price signals so that the entities that are going to build have the right incentives."

Industry groups helping prepare the report were the American Gas Association, API, the American Public Power Association, EEI, the Electric Power Research Institute, NMA, the National Rural Electric Cooperative Association, and the Nuclear Energy Institute.

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