Spain OKs energy saving prompted by oil price rise

AP News
Posted: Mar 04, 2011 11:44 AM
Spain OKs energy saving prompted by oil price rise

Spain lowered its highway speed limit Friday and passed other energy-saving measures such as switching to more efficient light bulbs to offset sharply higher oil prices and protect the country's fledgling economic recovery.

The 20 measures, which will take effect March 7, are essential because Spain is so dependent on imports for the energy it consumes, Industry Minister Miguel Sebastian said _ 75 percent of the total, compared to the EU average of below 60 percent.

A government statement said that at current oil prices the 20 measures taken together will save Spain $2.3 billion a year in energy imports.

Other changes include subsidizing purchases of special tires designed to reduce cars' gas consumption, cutting prices on commuter rail and mid-distance train tickets by 5 percent, and waging public awareness campaigns on energy savings in general and efficient driving in particular.

The measures were first announced last week and approved and fleshed out Friday at a Cabinet meeting.

Sebastian said the goal is to help people and companies save money _ not government deficit-reduction _ and make it available to spend in Spain and thus help the country's recovery from a recession marked by 20 percent unemployment.

"It is not government money that is being saved. It is the money of our citizens," Sebastian told a news conference.

Deputy Prime Minister Arturo Perez Rubalcaba said the measures are designed in part to protect Spain's incipient recovery and should allow the government to avoid redoing its economic forecasts because of sharply higher oil prices stemming in large part from the unrest in Libya.

Perez Rubalcaba declined to comment on the European Central Bank's warning Thursday that it might raise interest rates next month to contain inflationary pressures _ a step that would be stinging for debt- and deficit-laden countries like Spain _ saying the Spanish government never comments on such market-moving remarks.

Since the energy saving measures were first announced last week, they have come in for a barrage of criticism as sloppily improvised and futile, especially the one cutting the highway speed limit from 120 kph (75 mph) to 110 kph (68 mph).

Some of the most scathing criticism came from David Taguas, a former economic adviser to Prime Minister Jose Luis Rodriguez Zapatero.

"I applaud it. I love it, and cutting it to 70 even more. Let's sell our cars and travel on scooters," Taguas said Thursday. He said a more efficient measure would be a temporary increase in gasoline taxes to cut consumption.

Another high profile critic is two-times Formula One race car champion Fernando Alonso, who on Monday said "it was even hard to stay awake" at the new speed limit.

Sebastian hit back Friday, saying that Alonso's archrival and 2008 World Champion Lewis Hamilton had no complaints about the British 70 mph speed limit.

"Hamilton doesn't fall asleep at 110 kph," Sebastian said.