Background: Fossil Fuels

MARGARET WARNER:

The big three fossil fuels — oil, coal and natural gas — powered America's economy for most of the 20th century. And our need for these fuels will only grow in the 21st, predicts the author of the Bush energy plan, Vice President Dick Cheney.

VICE PRESIDENT DICK CHENEY:

Whatever our hopes for developing alternative sources and for conserving energy — and that's a part of our plan — the reality is that fossil fuels supply virtually 100 percent of our transportation needs and an overwhelming share of our electricity requirements. For years down the road, this will continue to be true.

MARGARET WARNER:

Oil and natural gas dominate U.S. energy consumption, providing 62 percent of the nation's overall energy supply. Oil heats businesses and homes and provides nearly all of the country's transportation fuel. Coal remains the dominant fuel for electrical power plants. It generates more than half of America's electricity, far outstripping every other source. Natural gas is increasingly popular with electric power plant operators and homeowners. Half of all Americans now heat their homes with natural gas.

In production, too, the fossil fuels dominate. Domestic energy produced from coal, natural gas and oil far outstrip what's produced from nuclear, hydropower and other renewable energy sources. Oil is found in 13 states, with the biggest production in the Gulf Coast region. But domestic oil production has declined over the past 20 years, and America's use of foreign oil has risen sharply. America's dependence on imported oil surged to 52 percent last year, up from 35 percent in 1973.

Natural gas reserves are being tapped in 18 states, with half the nation's supply coming from Texas and the Gulf Coast of Louisiana. But the sudden surge in natural gas popularity has outstripped the available supply, causing its price to surge as well. Coal is plentiful in the U.S. The top coal-producing mines are in the central and Midwestern states and the Rockies. Coal production is relatively cheap, but it has come under fire for environmental degradation at mining sites and for the carbon emissions and pollutants generated when it's burned to produce electricity.

President Bush 's energy plan calls for expanding production of all three fossil fuels, and the president says that, thanks to new technologies, it's possible to do that without harming the environment.

PRESIDENT GEORGE W. BUSH:

We must work to build a new harmony between our energy needs and our environmental concerns. Too often Americans are asked to take sides between energy production and environmental protection. The truth is, energy production and environmental protection are not competing priorities.

MARGARET WARNER:

The president's plan calls on the federal government to offer tax incentives to encourage new oil and gas drilling; permit oil and gas drilling on federal lands, including the Alaska national wildlife reserve or ANWR [Arctic National Wildlife Refuge]; ease regulations against drilling for oil and gas offshore; ease environmental rules on coal-burning power plants; spend $2 billion to research so-called "clean coal" technology; and, streamline the regulatory process for building new power plants, refineries and pipelines.