Bush seeks refineries at former defense bases

In a speech to a small business group, the president plans to urge using closed military bases as sites for new oil refineries. The Energy Department is being ordered to step up discussions with communities near such bases to try to get refineries built.

He will call on Congress to provide a “risk insurance” plan to insulate the nuclear industry against regulatory delays if they build new nuclear power plants. And he will endorse giving federal regulators final say over the location of liquefied natural gas (LNG) import terminals.

The president’s proposals were outlined late Tuesday by senior White House officials, speaking in general terms and on condition of anonymity in advance of the remarks.

The officials acknowledged the proposals were not expected to provide any short-term relief from soaring gasoline and oil prices, but rather are designed to demonstrate how technology can be used to encourage more energy production from diverse sources.

It is Bush’s second speech on energy within a week. The increased attention reflects the growing concern in the White House over potential political damage from high energy prices that are beginning to affect economic growth as well as the president’s approval rating.

As he did last week, he will call on Congress to give him an energy bill by this summer.

Sen. Pete Domenici, R-N.M., who is trying to put together an energy package that can pass the Senate, said he welcomed some of the president’s proposals. He is “making it clear that energy remains a top priority of this president,” said Domenici in a statement.

The White House officials said Bush believes the country needs a diverse supply of energy and more should be done to get new power reactors, refineries and liquefied natural gas plants built.

There has not been a new commercial nuclear power plant ordered in the United States since 1973 and no new refinery built in nearly 30 years, although many existing ones have been expanded. LNG terminal projects have been stymied in some regions by local opposition, even though the need for more LNG imports has been widely accepted.

Bush’s support for giving the federal government clear authority in locating LNG terminals comes after the House included such a provision in the energy bill it passed last week. Some lawmakers strongly opposed the measure, arguing it would deprive states and communities of a say in locating LNG import terminals, even in heavily populated areas.

Nuclear power accounts for about 20 percent of the country’s electricity. Some utilities have expressed interest in building a new reactor, perhaps as early as 2010, but want assurance of a smooth regulatory process to get financing.

To address their concern, the officials said, the president is directing the Energy Department to develop a federal “risk insurance” plan that would kick in if there were lengthy delays in licensing a new reactor. The officials acknowledged such a program would need congressional action and said they could not speculate on its cost.

The president also wants the Energy Department to discuss with local communities the possibility of building refineries on closed military sites. A shortage of U.S. refining capacity has been blamed in part for the high gasoline prices, most recently by Saudi Arabia’s Crown Prince Abdullah at a meeting this week with Bush.

The president’s call for a tax credit for gas-electric hybrid automobiles and for use of clean diesel is similar to a proposal in his budget earlier this year. The hybrid tax break was left out of the energy bill passed by the House last week.

Such a credit would provide $2.5 billion in tax incentives over 10 years, the White House officials said. Consumers would get a credit, up to $4,000, depending on the level of a vehicle’s fuel efficiency, if they purchase a hybrid or clean-diesel vehicle.