Energy Policy Proposal Urges More Domestic Production

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By Keith Schneider WASHINGTON - The White House has drafted a national energy policy that would encourage the growth of the domestic oil industry and remove obstacles to the construction of new nuclear power plants. But the plan calls for only a modest effort to encourage energy efficiency.

The plan, which is taking final form as U.S. troops are engaged in a war in the Persian Gulf, is intended to make the nation less dependent on foreign sources.

Through deregulation and tax breaks, it would encourage the oil, gas and coal industries to begin aggressive programs for increasing the domestic output of fossil fuels in the United States.

The Office of Management and Budget circulated a draft of the legislation embodying the policy to federal departments and agencies this week.

The proposals include few programs aimed at substantially reducing the consumption of energy. For instance, there are no proposals that would encourage motorists to reduce their use of gasoline, the largest single use for oil in the United States.

Copies of the draft were made available to several news organizations Friday. White House officials said the draft was receiving a last review from the Energy Department and other agencies and that when those had been incorporated it would be given to President Bush for his signature.

Energy Secretary James D. Watkins is scheduled to testify before the Senate Energy Committee and Natural Resources Committee on Feb. 19, and Sen. Timothy Wirth, D-Colo., said Watkins would present the plan then.

The draft of a letter accompanying the plan, from Watkins to Rep. Thomas S. Foley, D-Wash., the speaker of the House, described the policy's purpose.

``To secure future energy supplies, we must consider fossil fuels, nuclear power, renewable energy, fusion energy and enhanced R&D,'' the letter said.

``As events in the Persian Gulf have demonstrated so aptly, we must reduce our dependence on imported oil from unstable regions. This will require both reducing our overall dependence on oil, particularly in the transportation sector, and increasing domestic production in an environmentally sound manner.''

Oil industry executives, who were made aware of its details Friday, applauded the administration's aggressive plan to take some restraints off the domestic oil industry.

``If this is as described, it certainly sounds very positive, not only for the industry, but for the consumer,'' said Douglas G. Elmets, a spokesman for Arco in Los Angeles. ``It certainly makes us less reliant on insecure sources of oil.''

But environmental leaders who read the draft said it was one-sided and would fail to solve the nation's dependence on foreign oil, which supplies more than half the American consumption.

``There is no leadership here, no vision for a future of clean, efficient use of energy,'' said James L. Wolf, executive director of the Alliance to Save Energy, a group in Washington that lobbies for energy conservation measures. ``It's very aggressive in ignoring transportation efficiencies, which is the root of the oil problem.''

Democratic lawmakers predicted that if the legislation proposed by the White House was similar to the draft circulating Friday, its chances of passage are slim.

``It was only a couple of months ago that Admiral Watkins said in an interim report that the single loudest message he heard all across the country was support for energy efficiency in all sectors of the economy, and almost all of these opportunities were ignored,'' Wirth said.

Among the measures in the 142-page draft is a proposal to open 1.5 million acres of the Arctic National Wildlife Refuge in Alaska for oil exploration.

The administration wants to put 300,000 acres of the 19-million acre refuge up for bid to oil companies in the first round of oil lease sales; every two years after that, 300,000 more acres would be open for leasing to oil companies. …