Wednesday :: Apr 27, 2005

Bush's New Energy Policy Brainstorm: Build Refineries At Military Bases


by Steve

So after getting bad polls showing that voters have little confidence in him to do anything about rising energy prices or freeing us from dependence on Middle East oil, the vaunted White House policy team, all two of them (Cheney and Rove), quickly trotted out their new and improved energy policy today through the expert salesmanship of hand holder-in-chief George W. Bush.

Bush’s brainstorm today was to let oil companies build new refineries on closed military bases, a gift from the federal government to the cash-bloated oil industry. I’m sure that local communities, that were looking forward to converting those closed bases to economic development of their own choosing and to the liking of the local residents, would be thrilled at the thought of having an ecological nightmare granted to an oil company in their back yard. However, since some of our military bases were strategically placed in remote locations, how plausible is it to drop an oil refinery at these sites?

Unfortunately, it appears that the White House has no idea yet of which bases they have in mind. Nor has anyone at 1600 Pennsylvania Avenue apparently talked to industry yet about some of these ideas. (So instead of letting the industry write the policy like they did in the first term, industry is now just as surprised as anyone else at the crap that comes out).

A top independent oil refiner, Valero Energy Corp. said expanding its current fleet of refineries makes better economic sense than building new refineries at closed military bases. Lack of refining capacity is frequently cited by experts as a reason why gasoline prices have surged.
"The issue isn't necessarily new refineries, the issue is more refining capacity," said Valero's chief operating officer, Bill Klesse. "Clearly you could do expansion work within the refineries probably quicker and more economically than you could on (building a plant up from) grass roots."
A new refinery would probably cost $2 billion to $3 billion, said John O'Brien, president of Baker & O'Brien Inc., a Dallas- based energy consultant.
"These are such big bets in terms of investment that people are unwilling to take those kinds of risks," O'Brien said in a phone interview. Bush's proposal "may help a bit, but I wouldn't hold my breath over people racing out to build refineries on old military bases."

Ouch!

Any new refinery project must acquire dozens of government permits and overcome resistance from the local community, O'Brien said. "A lot of local groups and environmental groups don't want refineries in their backyard."
Refineries on former military bases would need a viable source of crude oil, O'Brien said. "And are they in areas where they'd need the product, or would they need to ship the product out of there?" he said. "Are there pipelines to get it out? There's a whole bunch of things that need to be considered."

Great policy work there, guys. In other words, for an administration that claims they don't read polls, this is an Exhibit A example of expedited crappy staff work in response to bad polls.

And apparently no one told Senate Energy Committee Pete Domenici until today about the Administration’s latest brainstorm. The first he heard about it was when Bush said it. And guess what? It’s not going into the Senate’s revised energy policy bill that Domenici is trying to write.

Senate Energy Committee Chairman Pete Domenici, a New Mexico Republican, said he plans to include all of Bush's proposals in a Senate energy bill. The lone exception may be Bush's plan to put oil refineries on closed military bases, which Domenici said he hadn't heard of until today.

Did I mention that Domenici and Bush are from the same political party?

Bush also proposed making it easier to build new nuclear power plants, and talked for the umpteenth time about pushing the development of hydrogen fuel cells, something that would benefit Halliburton and Bechtel, as well as a cadre of GOP high rollers.

Aside from the questionable decision-making that went into this example of clear-headed thinking, it appears that no one talked to the industry about how much it would help them to be given old military bases, rather than help in expanding capacity at existing refineries where the infrastructure and local support is already in place.

But in his list of things that won’t help for years, did Bush talk at all about conservation or taking steps to affect demand, or about fast-tracking an alternative energy industry here in the United States? No, although he did talk about tax credits for hybrid cars, an idea that his own House GOP leadership kept out of the energy bill last week.

Did I mention that Bush and the House leadership are from the same party?

And he wants the federal government to override state control of the siting and permitting of liquefied natural gas terminals in the country on the same day that producer nations gave signals that they want to form their own version of OPEC.

Once again though, what would our situation be like if Bush and Cheney had seized the opportunity to fast-track energy independence on September 12, 2001, instead of seeing the tragedy from the day before as just another opportunity to grab more oil in Iraq? It is now nearly four years later, and we are farther away from energy independence than we were then. These half-baked and ill-conceived measures will do nothing to help in the remainder of Bush’s term, and since maintaining the oil industry’s bottom line is BushCo’s primary policy, these pathetic proposals should surprise no one.

Steve :: 1:01 PM :: Comments (16) :: Digg It!