WASHINGTON – Among the challenges facing President Bush in his second
term is a big one left over from his first: energy.

The nation’s electricity grid is strained.

Coal, oil and natural gas prices are at or near record levels.

Ice is melting in the Arctic, heating up the debate about fossil fuels
and global warming.

New Republican seats in the Senate may give Mr. Bush a bill to allow oil
and natural gas drilling in the Arctic National Wildlife Refuge in
Alaska. Air pollution regulations in states that voted for Sen. John
Kerry for president may increase auto fuel efficiency while cleaning the
air. One could add 1 million barrels a day to the nation’s oil supply,
while the other could conceivably conserve just as much.

Democrats and Republicans will war over the measures.

Even if both succeed, that would cover only a couple years’ worth of
U.S. oil demand growth. China’s oil appetite is growing at an even
faster rate, which is a major reason prices shot up around the world
this year.

“You just see this tidal wave of demand coming around the world,” said
Daniel Yergin, chairman of Cambridge Energy Research Associates.

Oil is causing the most anxiety. Some say world oil production has

Others say it will soon top out everywhere but the Persian Gulf, which
would concentrate enormous power in Saudi Arabia, Iran, Iraq, Kuwait and
the United Arab Emirates. Still others argue the problem is access for
drillers to politically sensitive areas.

Rep. Joe Barton, R-Ennis, chairman of the House Energy and Commerce
Committee, looks to Mr. Bush’s national security team for the biggest
impact on the search for solutions.

“Iraq is the one country that has significant potential to increase
production,” he said. “There were a lot of reasons to free Iraq and make
it stable, but that’s a big one for the United States.”

Mr. Barton, however, sees little prospect of pushing through Congress
the comprehensive energy legislation Mr. Bush has favored for four
years. He says he won’t exhaust his committee with another attempt to
pass it.

Congress has tied itself in knots trying to satisfy the many energy and
environmental constituencies linked in such a bill.

Comprehensive policy

Senate energy committee chairman Pete Domenici, R-N.M., however, vows to
press ahead with an overall energy bill as well as separate budget
legislation that would open the coastal plain of the Arctic National
Wildlife Refuge.

Those are steps the White House wants as well.

“The president remains committed to enacting a comprehensive energy
policy,” said White House spokesman Trent Duffy.

Many in Congress expected high prices to act as the impetus to get a
bill passed. Gasoline is up an average of 50 cents a gallon since Mr.
Bush took office in January 2001. Natural gas prices have gone up 13

Late this year, Congress responded with loan guarantees for a natural
gas pipeline reaching from the Alaskan Arctic to the lower 48 states and
with tax cuts for alternate sources of energy.

Congress went along with Mr. Bush in increasing funding for the
Strategic Petroleum Reserve, which will soon hold 700 million barrels of
oil – enough to replace all imports for about two months.

Other sources

In the next few years, Mr. Yergin said, more oil will come into the
market from places such as the Caspian Sea and West Africa. That will
weaken oil prices and the political pressure for policy action.

“Several things have come together this year – uncertainty in Russia,
unrest in the Middle East, booming Asian oil markets – to focus
attention both on the challenge the oil industry faces to develop new
supplies and also on energy security,” Mr. Yergin said.

“In the next couple of years, we see a build up in non-OPEC supply
coming into the system,” he said. “Our view is there are ample resources
if there is access and time enough to develop them. But this is one of
those times when you need to do everything, from developing new
resources to increasing efficiency.”

California’s rules

California’s strict new regulations mandating lower emissions of
greenhouse gases may force automakers to build more fuel-efficient cars,
said Therese Langer, director of transportation programs at the American
Council for an Energy-Efficient Economy. The California regulation
requires a 30 percent cut in carbon dioxide emissions by 2016 for new
cars and light trucks.

Seven Northeastern states have in the past followed California’s lead on
tougher clean air standards, and may do so again.

“We definitely see the state work on this as a bright spot,” Dr. Langer
said. Automakers are expected to fight the California regulations in
court. They disrupted earlier clean-air requirements when a federal
judge ruled that only Congress had the authority to set fuel-efficiency
standards for cars and trucks. The new requirement makes no mention of
fuel efficiency, saying only that consumers should save more in
operating costs than the $1,000-per-vehicle price hike expected to meet
the greenhouse gases test.

Multiple solutions

Mark Baxter, director of the Maguire Energy Institute at Southern
Methodist University, says opening the Arctic National Wildlife Refuge
(ANWR) and increasing fuel efficiency through clean air standards would
buy the country time needed to come up with more far-reaching solutions
to the energy challenge.

“It takes a long time to put alternatives in place, and we are in a
crunch right now,” he said.

Mr. Baxter is looking to nuclear fusion to power a transition to
hydrogen-fueled vehicles as the way to escape dependence on insecure,
diminishing oil resources. But other alternatives – solar power,
plant-based ethanol fuel, wind energy – could also achieve
breakthroughs, he said.

“We need increases in production the Republicans are backing, and
conservation moves the Democrats are making, to get us over the hurdle
until we have time to figure out the best alternate way for producing
energy to carry not only us, but the world, forward,” he said.

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WASHINGTON – Mr. Bush’s hopes for energy legislation in his second term
may depend on his choice for energy secretary.

Democrat J. Bennett Johnston, a retired senator from Louisiana, has been
mentioned as a possible replacement for outgoing Energy Secretary
Spencer Abraham. A Democrat might win votes from former Senate
colleagues for key energy measures such as letting oil drillers probe
the Arctic National Wildlife Refuge.

Others getting a mention in Congress and among energy lobbies include
Tom Kuhn, chairman of the Edison Electric Institute, who was Mr. Bush’s
Yale roommate; Tony Garza, former Texas Railroad Commission chairman who
is U.S. Ambassador to Mexico; and former Deputy Energy Secretary Bill
Martin, who also served as a national security aide to President Ronald

Rep. Joe Barton, R-Ennis, chairman of the House Energy and Commerce
Committee, said he hasn’t talked with Mr. Bush about the position, but
doubts a Texan will get the job.

Some energy lobbyists say Deputy Energy Secretary Kyle McSlarrow, a
Republican from Virginia, is the front-runner.

Jim Landers

The issue: Energy prices have soared, supplies are more uncertain
than in many years and much of the nation’s energy infrastructure needs

President’s plan: President Bush has worked from a 2001 plan
drafted by Vice President Dick Cheney and others in the administration
to address energy security at home and abroad. Mr. Bush has endorsed
legislation with reliability standards for electricity grids, drilling
in the Arctic National Wildlife Refuge, incentives to build nuclear
power plants and funding for alternative energy research.

Where things stand: Legislation has stalled in the Senate over
drilling in the Arctic wildlife refuge and providing liability
protection for makers of MTBE, a gasoline additive that lessens air
pollution but has contaminated many drinking water supplies.

Cross currents: Senate Democrats and House energy committee
chairman Joe Barton, R-Ennis, prefer a piecemeal approach to energy
legislation. The White House and Senate Republicans still want a
comprehensive bill.

SOURCE: Dallas Morning News research