ENERGY task force expected to recommend tax breaks

Friday, May 11th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ The Bush administration's energy task force will recommend tax breaks to promote conservation and develop renewable energy sources, but still focus primarily on increasing conventional energy supplies, according to government officials.

The energy blueprint being unveiled next week also will call for relaxing clean air rules to give refiners more flexibility in producing and distributing gasoline and ease regulatory barriers to nuclear power plant construction, sources said, speaking on the condition of anonymity.

Democrats and Republicans have hammered the administration in recent days for proposing deep spending cuts for renewable energy programs, such as solar and wind, and in government research into technology that would increase energy efficiency and conservation.

Energy Secretary Spencer Abraham has defended the cuts, including slashing solar and wind research money by 50 percent. But he suggested Thursday at a Senate hearing that some of those funds may be restored, subject to recommendations and priorities set by the energy task force.

While details remained sketchy, the government sources said the task force will recommend tax breaks for wind power projects, purchase of solar technology, hybrid gas-electric automobiles, research into hydrogen fuel cells, and energy facilities using organic waste.

Administration officials also hinted Thursday that the White House has not categorically ruled out _ as had been widely believed _ some tinkering with federal fuel economy standards for small trucks and sport utility vehicles. However, any changes likely would be linked to a study by the National Academy of Sciences on the impact of these standards on safety and energy savings.

Other sources said the task force will recommend regulatory relief for construction of nuclear power plants and tax incentives to develop technologies that make coal less polluting.

Both nuclear and coal, which together account for nearly three-fourths of the electricity produced, are essential to meet future energy needs, the task force will declare. While urging expanded development of natural gas, the report will warn against relying too heavily on a single energy source, including natural gas.

Administration officials have repeatedly said they want to produce a blueprint of a ``balanced'' energy plan emphasizing all sources.

Following up on that theme, President Bush will officially unveil the policy next Thursday at a Minnesota plant that burns coal, natural gas, oil and renewable wood waste to produce both heat and electric power.

Still, the thrust of the energy task force recommendations will be on development of conventional fuels such as coal, oil and natural gas, and improving electricity grids, natural gas pipelines and refining facilities.

The task force will call for easing some regulatory barriers on oil refiners including changes in clean air requirements to give refiners more flexibility in gasoline production.

Refiners have complained that current clean air requirements force them to produce nearly a dozen different blends of gasoline for specific regions. This causes both production and distribution problems, they have argued in presentations to the task force.

It was unclear how the task force envisions eliminating the boutique gasoline blends, or whether the proposal would assume a waiver in some cases of a mandatory sale of specific blends of reformulated gasoline. Reformulated blends, which include an oxygen additive to make it burn cleaner, account for about a third of the gasoline sold.

In other energy-related developments Thursday:

_A House Energy and Commerce subcommittee rejected a Democratic proposal for price controls on wholesale electricity sales in California. The amendment to a bill that takes modest actions to help California boost power supplies was defeated, 20-12. The bill later advanced to the full committee. California Gov. Gray Davis said it ``will do little to address our current situation.''

_Sen. Byron Dorgan, D-N.D., called for legislation to create a special House-Senate committee to investigate soaring energy prices and what he called industry price gouging.

_Sen. Dick Durbin, D-Ill., said he will seek creation of a national consumer energy commission that would give consumers a voice in the debate over energy shortages and rising prices.