August 7, 2001 | News Releases on Energy and Environment
WASHINGTON, Aug. 7, 2001-President Bush's energy plan would cut electricity costs and curb U.S. dependence on foreign oil, the first independent study of the proposal shows. The president's proposal, passed nearly intact by the House of Representatives before the August recess, also would boost energy production and economic growth.
The report-prepared by The Heritage Foundation's Center for Data Analysis in partnership with DRI/WEFA, the nation's premier economics firm-compares the nation's energy prospects over the next 30 years if the Bush plan were enacted to what would happen if present policies continue. "The results show that President Bush is right to pursue a pro-growth, taxpayer-friendly course in refining the nation's energy policy," says lead Heritage analyst William Beach.
By 2020, the report finds, the Bush plan would boost energy efficiency 20 percent beyond what would occur under present law. Its conservation programs would cut energy demand by 4.2 quadrillion British thermal units-enough energy to run almost 40 million homes for one year. By 2030, average line losses in electricity transmission would be reduced by 50 percent through infrastructure upgrades and expansions. And the plan would leave electricity prices 2 percent to 4 percent lower in 2030 than if present policies continue.
The Bush plan also would help increase energy supplies and decrease demand by substantial amounts, according to the analysis. Thanks to its market-based approach to car and truck fuel economy, Americans would need 12 percent less gasoline by 2030 than if present policies are continued.
At the same time, the plan's push to increase oil exploration and refining capacity would lead to 27 percent more production and 7.7 percent more refining capacity by 2030 than otherwise would be the case. Oil and petroleum product imports would be eight percentage points lower under the Bush plan-57 percent as opposed to 65 percent.
The $33.5 billion in tax breaks and other incentives to the power industry would do more than increase oil and gas exploration, the analysts say. It also would help develop new, cleaner coal-burning technologies, promote nuclear energy and develop better conservation techniques and alternative fuel sources.
The Bush plan would produce a sizable economic boost, too, the report says. If it passes, it will mean a 0.1 percentage hike in economic growth every year between now and 2025, which would bump America's gross domestic product by $540 billion in 2025. The plan also would create 1.5 million more jobs than would be created under current law, raise typical family incomes by more than $1,800 per year by 2025 and increase investment by about $65 billion per year.
"Washington policy-makers have three choices," says Beach. "They can do nothing and prolong the imbalance between energy demand and supply. They can opt for quick fixes that may be popular but won't solve the problem for any period of time. Or they can enact a long-term strategy that will meet the nation's energy needs for decades to come.
"President Bush has chosen the third course. His plan corrects the imbalance of supply and demand, assures America's energy future and provides responsible stewardship of the country's natural resources."
The report can be accessed online at www.heritage.org/shorts/20010803energy.html. Copies also can be obtained by calling Heritage Media Relations at 202-675-1761.