Executive Summary

President Bush's energy plan offers a smorgasbord of incentives for the energy industry, emphasizing the need to increase domestic fossil fuel supplies and renewing a commitment to nuclear power. The administration's proposal -- prepared by Vice President Cheney's energy task force -- also includes modest proposals related to energy efficiency and renewable energy sources. However, it is clear that, as Mr. Cheney stressed in a recent speech, the Bush administration views conservation as perhaps a "sign of personal virtue," but "not a sufficient basis for a sound, comprehensive energy policy."

"Slower, Costlier and Dirtier: A Critique of the Bush Energy Plan" was drafted by a team of NRDC experts, drawn from each of NRDC's program areas. It is intended to be a guide to some of the most critical environmental, health and energy issues affected by the administration's proposal. It responds to statements made by senior administration officials during the development of the plan, and a preliminary review of the report itself. In days to come, NRDC will continue to review the text of the Bush plan, and will provide additional analysis as necessary.

Our review shows that the Bush energy policy is fundamentally flawed. The Bush plan would provide no short-term relief for Americans struggling to pay their gasoline and electric bills this summer. And, over the long-term, it would increase pollution, despoil the environment, threaten public health and accelerate global warming. Moreover, it would have no impact on energy prices, and no practical effect on U.S. dependence on foreign sources of oil. Who would benefit? The oil, coal and nuclear industries that shoveled millions of dollars into Bush campaign coffers.

Fortunately, there is a better way. Our nation can meet its energy needs without undermining environmental safeguards or ruining the last remaining pristine wilderness areas in the country. The cornerstone of a responsible approach is increased energy efficiency and fuel efficiency that relies on readily available, cost-effective technologies. Correspondingly, NRDC and other environmental groups call for reducing U.S. reliance on the dirtiest fossil fuels -- coal and oil.

Although Vice President Cheney claims we have to build 1,300 electric power plants over the next 20 years, a November 2000 Department of Energy report found that energy efficiency and renewable power sources could meet 60 percent of the nation's needs for new power plants.

Increasing the energy efficiency of appliances would also save money and reduce air pollution. Unfortunately, President Bush chose to weaken the efficiency standards for new air conditioners issued by his predecessor, a step that by itself will force construction of more than 40 power plants by 2020, cost consumers as much as $900 million in higher electric bills in that year, and generate an extra 180 million tons of carbon dioxide (CO₂ ) emissions over the next three decades.

Finally, the administration seems content to wait and study the need for increasing fuel economy of the nation's cars, light trucks and sport-utility vehicles. NRDC believes that it is time to move beyond studies. Improving average fuel economy to 40 miles per gallon would save 15 times more fuel than might be economically recovered from the Arctic National Wildlife Refuge -- a proposal that has been a cornerstone of the administration's energy policy for months.

The bottom line is that the quickest, cleanest and cheapest way to meet our energy needs is a program that improves energy efficiency, increases fuel economy, and invests in renewable energy sources.

It is doubtful such views received a fair hearing at task force meetings. The conclusions of the Cheney task force are a product of an undemocratic process. When NRDC filed a Freedom of Information Act request for documents identifying members of the task force and the calendars of task force members, the Department of Energy denied the request.

Ironically, the administration of President George H.W. Bush published its National Energy Strategy 10 years ago, and did not shroud its development in secrecy. The first Bush administration held 18 public hearings throughout the nation, and reflected a "national commitment to greater efficiency in every element of energy production and use."

Forbes magazine said in May that "there is no energy crisis and there is little reason to expect there will be. Conservation is a big part of the reason why. While California's blackouts are in the headlines, the Golden State's problems are local and, indeed, do not even cover all of California." The magazine went on to say that there is no supply problem, that between 1980 and 2000 energy consumption increased only 25 percent while gross domestic product jumped 90 percent, and over those two decades energy prices rose by 49 percent while nonenergy prices increased by 119 percent.

Crisis or not, we welcome the opportunity for a public debate over America's energy future. But that debate has to be an open, democratic and honest one, free from the taint of backroom deals and political payoffs. From our initial review, the Cheney task force recommendations fall far from that measure. The Bush energy plan would fulfill the wildest dreams of the oil and coal industries at the expense of public health and the environment. Nevertheless, we remain hopeful that the coming months of public debate will open the doors to a new national energy policy -- one that meets our energy needs and improves environmental quality and the health of our citizens.

In the pages that follow, NRDC presents of summary of the Bush energy proposal's most critical components. NRDC's key critiques and alternative approaches are summarized below:

Overall Impacts
The Bush plan will accelerate CO₂ emissions that cause global warming, damage public health, and scar the landscape, but it will not solve America's energy problems. It won't keep the lights on in California this summer, it won't lower consumers' energy bills, and it won't protect the environment.

Coal
The Bush plan is a bad idea for America's health and environment. It would allow poorly controlled and already dirty coal-fired plants to increase their pollution dramatically and unnecessarily, and it would expand our reliance on the dirtiest form of power generation. Leaning more heavily on coal for power generation means more deaths from particulate air pollution and more poisoned water and more scarred land. The Bush administration also ignores the fact that energy efficiency and renewable power could satisfy as much as 60 percent of projected increased demand for electricity over the next 20 years.

As described more fully in the electric power section, the Bush energy plan promotes a 10-year, $2-billion subsidy for so-called "clean coal" technology, first proposed in the president's budget. Even if the Energy Department's research and demonstration targets are met, proposed "clean coal" plants still will emit more pollution than alternative technologies -- natural gas plants and renewable power sources. While the plan says the objective is to make coal-fired electricity less polluting, the president's budget documents reveal that the goal is the "expansion of coal use for power generation in the United States" (emphasis added). Expanding coal use will further increase CO₂ pollution from electricity generation.

Drilling in the Arctic Refuge
The case for drilling in the Arctic National Wildlife Refuge makes no sense. Drilling would do nothing to resolve the current California energy crisis, and would do virtually nothing to meet America's long-term energy needs. Plus, the administration overstates how much oil could be pumped from the Arctic Refuge. In fact, there is only a six-month supply of economically recoverable oil in the refuge's coastal plain. The Bush plan to drill in the Arctic Refuge would cause permanent and unnecessary environmental damage, would do nothing to address America's long-term need for greater energy efficiency, would not affect the price of gasoline at the pump, and would not significantly reduce U.S. dependence on foreign oil.

Drilling in the Outer Continental Shelf (OCS)
The Bush plan calls for a review of statutes, regulations and executive orders pertaining to Outer Continental Shelf activities, and broadly recommends that the interior secretary examine impediments to federal oil and gas leasing on public lands, which include offshore areas. This recommendation sets the stage for lifting the OCS moratoria that protects the East and West Coasts, Alaska's Bristol Bay, and most of the Eastern Gulf of Mexico off Florida from new leasing. It also could lead to actions that would weaken environmental safeguards and the ability of states to object to harmful OCS activities off their coasts.

There is no justification to lift the OCS moratoria. NRDC also opposes offshore oil and gas activities in other sensitive areas not protected by the moratoria, including the Sale 181 area off Florida and the OCS off Alaska. Drilling in these areas poses unacceptable environmental risks of oil spills, air and water pollution, seismic impacts and onshore damage. Drilling is not necessary, given that government estimates show 60 percent of the untapped economically recoverable oil and 80 percent of the untapped economically recoverable natural gas on the OCS are located in areas that are currently open to the oil industry.

Drilling on Public Lands
The Bush plan would be a recipe for widespread industrialization of rural areas across the Rocky Mountain states. It would also cause widespread damage to publicly owned resources -- including spectacular wildlands, habitat for deer, antelope and other species, as well as air quality, visibility and water quality. We don't need to drill in sensitive areas. The vast majority of the public lands managed by the Bureau of Land Management in the Rocky Mountain states -- about 95 percent -- are open for leasing and development. In addition, the quantity of gas closed to development in the Rockies amounts to less than 2 percent of the nation's total gas resources. Millions of acres of federal lands are already under lease for coal, oil and gas.

Electricity Infrastructure America does not need to override state and local decision-making to spur a massive expansion of its power transmission lines as the Bush administration has proposed. Such development threatens environmentally sensitive areas and is not necessary because extensive transmission lines are being built already. Greater power line capacity could also be achieved by technology upgrades. Regulatory rollbacks proposed by the Bush administration to speed up line construction are unnecessary and could prove to be environmentally harmful.

Electric Power
The Bush energy plan takes aim at a key clean air rule, called "new source review," which safeguards public health against vast increases in pollution when power companies expand their plants without modern pollution controls. The Bush energy plan invites the oil, utility, and coal industries, the Department of Energy, and other agencies to weaken Clean Air Act rules and interfere with pending enforcement lawsuits. The administration should not disrupt enforcement of the law. Power companies should continue to be required to install state-of-the-art pollution controls when they expand their plants and increase pollution significantly.

The Bush energy plan is a recipe for more pollution and higher utility bills. It is founded on a supply-biased forecast of the country's need for 1,300 new power plants. However, an alternative policy, emphasizing energy efficiency and renewable power, could dramatically reduce the number of power plants needed, lower Americans' electric bills by $30 billion per year, and significantly cut all forms of power plant pollution, including carbon dioxide. According to a November 2000 Department of Energy Report, "Scenarios for a Clean Energy Future," which the Bush administration has ignored, energy efficiency and renewable power can meet 60 percent of the nation's need for new electric power plants over the next 20 years. Moreover, an energy policy that takes advantage of efficiency and renewable energy sources could lower Americans' electric bills by $30 billion per year, cut CO₂ pollution by one-third, and slash emissions of other pollutants in half.

Under the Bush plan, the power sector's contribution to global warming will grow ever larger each year. Because President Bush abandoned his campaign promise to curb power plant emissions of CO₂ , his energy plan now offers only a vaguely defined "three-pollutant" plan that, without CO₂ , meets neither environmental nor business needs. This three-pollutant plan will not stop power plant CO₂ emissions from rising -- indeed, the Bush plan envisions a 35 percent increase in power plant CO₂ emissions by 2020.

Fuel Economy for Vehicles
Americans are facing the prospect of record-breaking gasoline prices this summer, yet the Bush plan does nothing to help consumers now -- or more important, to ensure improvements in the fuel economy of the cars that Americans will buy in years to come. The tax credits for hybrid and fuel cell vehicles proposed in the Bush plan are helpful to spur expanded use of these technologies, but they are no substitute for across-the-board increases in fuel economy standards.

While the traditional surge in summertime driving means there's little that can be done to reduce gas prices this July 4th weekend, the Bush administration should move quickly to close the SUV loophole immediately -- and then increase overall fuel economy to 40 mpg over the course of the decade. Doing so would save more than 50 billion barrels of oil over the next 50 years -- more than 15 times as much oil as is expected to be economically recoverable in the Arctic Refuge. In contrast, the Bush plan merely follows the law in directing the Department of Transportation to consider a forthcoming report by the National Academy of Sciences.

Nuclear Power
As part of its new energy policy, the Bush administration wants to try to revive the moribund nuclear power industry, despite its unacceptable risks and high costs. Trying to solve U.S. energy problems by increased reliance on nuclear energy will be too costly for the environment, public health and consumers. The Bush plan fails to address the four major obstacles that have dogged nuclear power for decades: Nuclear power poses long-term proliferation risks; reactor safety issues remain unresolved; the United States has no long-term plan for storage of radioactive wastes; and the nuclear power industry is not competitive with a host of cleaner and cheaper technologies and requires continued federal intervention to survive.

Oil Refineries
As mentioned above, the Bush energy plan takes aim at a key clean air rule, called "new source review," which safeguards public health against vast increases in pollution from oil company plans to expand their plants without modern pollution controls. Essentially, the administration is inviting the oil, utility and coal industries, the Department of Energy, and other agencies to weaken Clean Air Act rules and interfere with pending enforcement cases. The administration should not disrupt enforcement of the law. Oil refiners should continue to be required to install state-of-the-art pollution controls when they expand their plants and increase pollution significantly.

Reformulated Gasoline
The Bush energy plan seeks to reduce the number of so-called "boutique" fuels that are sold in many regions of the country to help battle air pollution. NRDC supports a shift to a regional or national specification for reformulated gasoline -- so long as this common-sense approach does not compromise critical health protections provided by cleaner gasoline. NRDC does not support allowing dirtier fuels simply to increase oil company profits.

Renewable Energy
The Bush plan offers limited support for renewable energy technologies, despite their enormous potential -- and even though renewable energy technologies such as wind and solar are the fastest growing energy sources in the United States and the world today. One reason for their emerging success is that they can be brought online very quickly to help California and other states meet their power needs. For example, a 300 megawatt (MW) wind farm project on the Oregon-Washington border was announced earlier this year, as was a 260 MW project at the Department of Energy's nuclear test site in Nevada. Both should be supplying badly needed power to the Western grid before the end of the year.

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