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President Bush Proposes New Energy Initiatives

January 24, 2007 at 11:15 PM EDT

MARGARET WARNER: President Bush took to the road today to tout his new energy plan. His first stop: a DuPont research complex that produces alternative fuel from grasses and wood chips.

In remarks later at a Wilmington hotel, he repeated his call for measures he said would advance U.S. energy independence and protect the environment.

GEORGE W. BUSH, President of the United States: I made the case last night to the American people that we have got to do something about our dependence on oil for two reasons.

One, dependence on oil provides an economic and national security risk, a problem that this country better start dealing with in a serious fashion now before it becomes acute.

And, second, we’ve got to be wise stewards of the environment, and dependency on oil makes it harder to be wise stewards of the environment.

MARGARET WARNER: The centerpiece of his plan: cutting gasoline use by 20 percent from projected levels within 10 years. That goal would be achieved by mandating that fuel makers quadruple their production of renewable and alternative fuels, including ethanol; and by raising fuel-efficiency standards for cars and trucks, but applying the standards more flexibly.

The president remains opposed to Congress setting new mandatory mileage standards.

The president did not speak of global warming today. But last night, he said the changes he’s proposed will help the U.S., quote, “confront the serious challenge of global climate change.”

Even stronger steps to combat climate change are being pushed elsewhere.

JAMES ROGERS, CEO, Duke Energy Corporation: The science of climate warming is clear. We know enough to act now; we must act now.

MARGARET WARNER: This week, a group of corporate chief executives, from giant manufacturers like DuPont and big power companies like Duke Energy, urged Congress to impose limits on greenhouse gas emissions this year.

Many members of Congress who listened to the president’s plan last night are promoting more far-reaching ideas, too. House Speaker Nancy Pelosi has created a Select Committee on Energy Independence and Global Warming. Her goal: to pass legislation that will, quote, “declare America’s energy independence” by July 4th.

Curbing dependence on oil

Dan Becker
Sierra Club
The biggest single step that he could take to curb global warming and cut our oil addiction is to raise the fuel economy standards, the miles-per-gallon standards for our vehicles.

And now three assessments of the president's plan. They come from Clay Sell, the deputy secretary of energy; Dan Becker, director of the Global Warming and Energy Program at the Sierra Club, an environmental group; and Jason Grumet, executive director of the National Commission on Energy Policy. It's a group of business, environmental, academic and labor leaders trying to promote bipartisan energy policies.

And good luck to you on that.

JASON GRUMET, National Commission on Energy Policy: Thank you.

MARGARET WARNER: The president's clear focus, though it was both energy security and global warming, was on the energy security side, ending or curbing America's dependence on imported oil. Dan Becker, how well does his plan stack up against that?

DAN BECKER, The Sierra Club: It doesn't stack up very well for three reasons.

First, the president misled the American people about what it will take to curb our oil addiction and global warming. Second, he fails to take a lot of the right steps. And, third, he's taking a lot of the wrong steps.

The biggest single step that he could take to curb global warming and cut our oil addiction is to raise the fuel economy standards, the miles-per-gallon standards for our vehicles. If our vehicles averaged 40 miles per gallon today, we'd use a little bit more than half of the gasoline we use today. And the president has the power to do this, and he hasn't exercised that power.

And today, the transportation secretary said, We're looking for the most big three-friendly approach to do it.

The reality is: We have the technology. This is auto mechanics, not rocket science. The president should do it.

Finally, on the wrong choices, there are a lot of warmed-over Cheney energy task force alumni that are making showings again: drill the Arctic National Wildlife Refuge; build more coal-fired power plants; build nuclear power plants; weaken the Clean Air Act. Those aren't the way to move toward energy security or to curb global warming.

Improving vehicle fuel efficiency

Jason Grumet
National Commission on Energy Policy
The devil is in the details. Will the administration now step up and actually lobby for a real aggressive piece of legislation that is not fraught with loopholes?

MARGARET WARNER: Secretary Sell?

CLAY SELL, Deputy Secretary, U.S. Department of Energy: Other than weaken the Clean Air Act, which we've never been for and taken a number of steps to strengthen, I think Dan really did a pretty good job of laying it out. The president is very serious about CAFE, and he proposed...

MARGARET WARNER: The mileage standards.

CLAY SELL: The mileage efficiency, the car efficiency standards. And he proposed a program that would allow us to reform it so that we get safety benefits. There are real safety problems with the way the mileage standards are set today.

But if we can reform the program, he's committed to put it on a path to save roughly 8.5 billion gallons of fuel per year in 2017. That's about a 4 percent increase a year in fuel efficiency, which is very important.

MARGARET WARNER: So the current average, if you average cars and trucks, is about 25 miles per gallon, is that right?

CLAY SELL: The passenger vehicle is about 27.

MARGARET WARNER: And where would it go to?

CLAY SELL: It would increase about 4 percent a year, to roughly the mid-30s by 2017.

MARGARET WARNER: How does that sound to you, Jason Grumet, and the whole plan?

JASON GRUMET, National Commission on Energy Policy: Well, I think the president deserves some credit for what he did say. There are a number of things he didn't say, but you simply cannot have a serious energy security position if you don't take action to increase fuel economy.

Fuel economy has been stagnant across the last three administrations. We haven't moved it since 1985. Our fuel economy is behind fuel economy in China.

And what the president said was that Congress should not only reform the program, but that Congress should direct the administration to, in fact, increase it by, as Clay said, 4 percent a year, which is about a mile per gallon a year, and that is actually a pretty aggressive increase.

So I think, as Dan points out, you know, the devil is in the details. Will the administration now step up and actually lobby for a real aggressive piece of legislation that is not fraught with loopholes? But if they do, I think this is a big step in the right direction.

Diversity of fuels

Clay Sell
Department of Energy
What we really need to improve energy security is a diversity of sources and a diversity of fuels. And the president is proposing a mandate of 35 billion gallons of alternative fuels by 2017.

MARGARET WARNER: Now, he did only address, really, though, transportation. Isn't that not even half of really our imported oil?

JASON GRUMET: Transportation is about two-thirds of the total oil usage, and, of course, there are a number of other places that we need to look to. But when you think about where the vast opportunity is, it is in personal vehicle transportation.

I mean, there are opportunities with trucks, which need to also be addressed. There are opportunities with the air fleet. There's heating oil and other issues. But fundamentally what is causing our addiction to oil is our absolutely inability to diversify away from gasoline and diesel fuel. And so I think buying time with fuel economy and then trying to diversify with alternative fuels is fundamentally the right framework.

MARGARET WARNER: Why isn't that reasonable?

DAN BECKER: Well, the devil is in the details, as Jason says. The challenge is, the president has the power and should use it now.

And relying a lot on alternative fuels, some of which can be beneficial for the environment, some of which can be a disaster for the environment -- if we turn coal into a liquid and use it to run our vehicles, then we get all of the pollution disadvantages of coal.

MARGARET WARNER: And you're saying the president did open the door to that?

DAN BECKER: Well, ask Mr. Shaw. But...


DAN BECKER: Sell, I'm sorry. But my sense is that the president wants to have a broad array of different fuels, some of which, like cellulosic ethanol, can be helpful, some of which can be quite harmful.

MARGARET WARNER: What's your view on this part of about what kind of alternative fuels he's really encouraging development of?

CLAY SELL: Yes, I'd like to elaborate on that. You know, today, there is very little fuel diversity in our transportation fuel. It is 97 percent petroleum, and we import over 60 percent of that from overseas.

And so what we really need to improve energy security is a diversity of sources and a diversity of fuels. And the president is proposing a mandate of 35 billion gallons of alternative fuels by 2017.

Now, about 15 billion of that should come from corn-based ethanol. Much of that, we believe, can come from cellulosic ethanol. But certainly we can also add to the diversity of our fuel supply by utilizing clean coal in environmentally sensitive ways to turn that coal into liquids, which give us further diversity into our fuel supply.

MARGARET WARNER: So are you saying that coal turned into, say, diesel gasoline can be done in an environmentally clean way?

CLAY SELL: Yes, I am.

JASON GRUMET: I'd like to take a little issue with that, Margaret. I think what this points to are the two key challenges we face: fuel dependence and climate change.

There are opportunities to take care of both of once, and increasing vehicle fuel economy does both. It both improves our oil security and it reduces greenhouse gas emissions.

Moving to alternative fuels is a mixed bag. There are many different flavors of alternative fuels. When it comes to turning coal into diesel, the best you can possibly do is break even. If you do not sequester every little molecule of carbon in the transition from coal to diesel fuel, you'll have about double the carbon emissions.

So cellulosic ethanol, great. Corn ethanol, good. Coal to diesel, not acceptable.

MARGARET WARNER: How significant do you think it was that last night the president talked about, in this context, confronting climate change or the challenge of climate change? Did that seem to you as significant movement, admission on his part?

JASON GRUMET: Well, I think the president's acknowledged that the climate is changing and human activity is part of it. And where I think the administration has then gone quiet is: What are we going to do to put a price on emissions to provide an innovation, give the marketplace an opportunity to really make a difference?

As long as the cost of venting a ton of carbon is zero, people aren't going to do a whole lot.

Now, what the president I think did yesterday, though, was to put a marker out there, which acknowledges that the debate is changing. I think there is an inevitability now to moving forward with mandatory action. And my hope is that the administration is going to join that debate more actively so that we can get it done this Congress.

MARGARET WARNER: How do you think the climate change...

DAN BECKER: The president is the last world leader to finally recognize that we need to solve the problem of global warming. So the good news is, he's finally facing the right direction.

The bad news is, he has no plan, no destination of how far he wants to go down that path, no road map to get there, and a lot of bad solutions, like more coal, like drilling the Arctic National Wildlife Refuge for more oil, which will make it difficult to get progress.

MARGARET WARNER: All right, briefly, give me one good idea that he didn't endorse that would really have an effect.

DAN BECKER: Well, he didn't make the commitment to actually curb global warming by raising the fuel economy of vehicles. He didn't say anything at all about using energy efficiency to reduce the amount of electricity we use so you don't have to burn as much fossil fuel to generate that electricity.

And he never talked about wind or solar power, which clearly have to be in the future, or we'll never get a climate that's safe for our kids.

Building efficient cars

MARGARET WARNER: Why didn't the president include new efficiency standards, or, for instance, what the CEOs talked about this week, which was imposing some mandatory emissions standards and letting businesses, you know, cap and trade, as they say, buy and sell the rights to pollute?

CLAY SELL: Well, the president -- efficiency and conservation have been a central theme of the president's energy policy for six years. We've done a number of those things, and we've made substantial progress.

And the CAFE proposal, which offers great energy efficiency benefits, if it is implemented by the Congress, will be a key part of that.

MARGARET WARNER: I'm asking about beyond the cars, vehicles.

CLAY SELL: Well, we have an established policy in place of appliance standards, efficiency standards, energy-efficient buildings. We have promoted hybrid electric vehicles, tax credits for solar components to put into businesses and residences.

And so a number of things have been done. In fact, all of their good ideas, which you asked Dan to lay out, the president has vigorously supported and have been reflected in the energy bills that he has signed.

MARGARET WARNER: So just to understand, you're saying you -- the president didn't feel there was a need to do anything new and additional on that front?

CLAY SELL: We are doing a number of vigorous things. And, in fact, today he even signed a new executive order which directed the federal government, which by the way is the largest energy consumer in the world, to dramatically improve energy efficiency.

MARGARET WARNER: You wanted to get in here?

JASON GRUMET: I think that Clay is right, that the administration has done a number of very important things, but voluntarism is just fundamentally no longer a responsible strategy to confront climate change.

And what surprises me is that this is an administration that favors using the market appropriately, in just about every situation, except the situation we have which, in fact, obliges us in the most significant way to engage the marketplace, and the innovation, and ingenuity of the private sector.

What we have found time and time again is, if we make the prices work, if we set the right incentives, that's when we're going to find the innovative, cheap solutions to our problems.

DAN BECKER: Two-thirds of the global warming emissions in the United States come out of our power plants and our vehicles. We need to cut both of those way back in order to have a safer climate.

MARGARET WARNER: All right, we're going to have to leave it there. Thank you all three very much.

DAN BECKER: Thank you.