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Bush To Call For SPR Boost, Reduced Gasoline Use January 23, 2007

Posted by notapundit in Politics, US News, White House.

WASHINGTON (Dow Jones)–Unveiling new plans to strengthen U.S. energy security, President George W. Bush will call for Americans to slash their usage of gasoline by 20% in the next 10 years, and say the nation’s emergency oil stockpile should be doubled by 2027.

Bush, battling a low approval rating and congressional pressure over the Iraq war, will devote about half of his sixth State of the Union address Tuesday to domestic issues, with new initiatives most prominent in the areas of energy and healthcare.

The dramatic target for cutting gasoline usage can be reached by measures addressing supply and demand, said Joel Kaplan, the White House’s Deputy Chief of Staff for Policy. Bush will call for a big boost in renewable and alternative fuels, and ask for the authority to reform fuel standards for cars.

“For too long, our nation has been dependent on oil,” the White House said in briefing materials distributed to reporters. “America’s dependence leaves us more vulnerable to hostile regimes, and to terrorists – who could cause huge disruptions of oil shipments, raise the price of oil, and do great harm to our economy.”

The president will call for an increase in the size and scope of the current renewable fuel standard, or RFS, to require 35 billion gallons of renewable and alternative fuels in 2017. That is nearly five times the current target for 2012, and an amount the White House says will displace 15% of projected yearly gasoline use.

To complete his goal of cutting gasoline usage by 20% over 10 years, which the White House calls its “20-in-10” initiative, Bush will ask for the authority to reform Corporate Average Fuel Economy, or CAFE, standards for cars and extend a current rule for light trucks and SUVs. Moving to a so-called attribute-based system is projected to reduce annual gasoline use by up to 8.5 billion gallons, or 5%.

“There’s no question it’s an ambitious goal but we think it’s an achievable goal,” Kaplan said of the 20-in-10 initiative.

Under pressure from environmental groups and lawmakers to address climate change, Bush will say that his proposals will stop the projected growth of carbon dioxide emissions from cars, light trucks and SUVs within 10 years.

Another key proposal calls for the U.S. to double the capacity of its 727 million gallon strategic petroleum reserve by 2027. Last year, Congress gave the administration the authority to boost the reserve’s size to 1 billion gallons, but Bush will ask lawmakers for the authority to add another 500 million gallons of capacity.

Asked if the buildup of the SPR was due to concern about a looming disruption in the supply of oil, White House spokesman Tony Snow said it is “merely a matter of providing for energy security…We’re rebuilding the cushion.”

Currently, 691 million barrels are in the reserve, an amount that represents 55 days of net oil imports, according to the White House. By contrast, the reserve held around 118 days of net oil imports in 1985. The White House says doubling the SPR will provide another 97 days of net oil import protection.

Energy Secretary Samuel Bodman said the government plans to begin purchasing crude oil this spring at a rate of about 100,000 barrels a day. “In 2008 and beyond, as we work our way to 1.5 billion barrels, the Department will determine future fill rates based on information and market conditions available at that time,” Bodman told reporters.

Tuesday’s speech will be Bush’s first State of the Union to a Congress controlled by Democrats, and comes at a time when polls suggest the public isn’t happy with the president’s performance. Just 28% of those polled by the Wall Street Journal and NBC News approve his handling of the Iraq war, two weeks after Bush laid out his new strategy on Iraq. National Security Adviser Stephen Hadley said Bush wouldn’t “replow that ground,” but would discuss the broader consequences of a failure in Iraq.

“We go into this process with no illusions about the atmosphere we’re operating in,” White House counselor Dan Bartlett said of Tuesday’s speech.

Nonetheless, Bush isn’t expected to directly address pending congressional resolutions on Iraq.

Administration officials said Bush will touch on his plan to balance the federal budget by 2012, and renew his call for stronger control of pork-barrel spending and entitlement reform. The president, however, will go into more detail on fiscal issues when he delivers a “state of the economy” address next week, an official said. Neither a date nor a location has been set for that speech, but an official said it likely would be outside Washington.

Despite strong economic growth, low unemployment and robust stock markets, Bush’s message on domestic issues has had trouble breaking through the loud debate over Iraq. Polls show a majority of Americans would rather have Congress setting policy.

“It isn’t always the economy, stupid,” said Peter Wallison, resident fellow at the American Enterprise Institute.

Still, the White House hopes the State of the Union address can reclaim some momentum for its domestic agenda. One of the signature initiatives would reform the tax code to create a standard deduction for health insurance – $15,000 for families and $7,500 for individuals. That, along with a plan to redirect federal funds to help states make health insurance more affordable, is designed to cut the number of uninsured and make it easier for people to buy private health insurance, rather then rely on employer-provided plans.

However, the healthcare proposals already have drawn criticism from Democrats and face an uncertain future on Capitol Hill.

By Henry J. Pulizzi, Dow Jones Newswires


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