Abraham Speaks on Energy Crisis

by William Yeatman on March 20, 2001

in Small business

Energy Secretary Spence Abraham began to lay out the administrations energy policies in a major speech at the U. S. Chamber of Commerces National Energy Summit on March 19 in Washington, D. C. He left no doubt that the Bush Administration intends to keep its campaign promises to push policies that will promote more affordable and abundant energy supplies for American consumers.

Abraham characterized the Clinton-Gore Administrations energy policy as, “You cant find it, you cant transport it, and even if you get it, we dont want you to use it. Through neglect or complacency or ideology, this approach has led us to the crisis we face today.”

He addressed three key points that the administrations policies must address:

  • “First, demand for energy is rising across the board, but particularly for natural gas and electricity;

  • “Second, supplies are being limited by a regulatory structure that, in many respects, has failed to keep pace with advances in technology and an uncertain political environment that often discourages investment in desperately needed facilities;

  • “And third, our energy infrastructure that network of the generators, transmission lines, refineries and pipelines that convert raw resources into usable fuel is woefully antiquated and inadequate to meet our future needs.”

Americas demand for energy will continue to increase, according to Abraham. He quoted forecasts from DOEs Energy Information Administration that demand for oil will increase by 33 percent over the next 20 years, for natural gas by 62 percent, and for electricity by 45 percent.

It is difficult to meet these demands, however, when capacity is lacking. “Since 1980,” said Abraham, “the number of American refineries has been cut in half. There hasnt been a new refinery built in the United States in over 25 years.” Much of the problem is due to government interference. “New regulatory interpretations limit the ability of existing refineries to expand capacity,” he said. “Add to that regulations that require the production of more than 15 different types of gasoline and you have a refining industry strained to capacity, leaving us dangerously vulnerable to regional supply disruptions and price spikes.”

To meet Americas rising demand for electricity over the next 20 years, said Abraham, the U.S. will have construct 1,300 new power plants or 65 per year. And he added that if history is a guide, then this may be too conservative an estimate. Abraham reiterated coals importance to electricity generation and pledged that, “The administration will not regulate coal out of existence, and we will not support measures that will threaten electricity supplies and significantly raise electricity prices.”

Finally, Abraham noted the importance of a reliable and affordable supply of energy. “This nations last three recessions have all been tied to rising energy prices and there is strong evidence that the latest crisis is already having a negative effect.”

Californias power crisis is causing layoffs and companies to move to states with reliable energy supplies. Abraham noted that “Intels CEO Craig Barrett announced that the worlds leading chipmaker wont be expanding in California: As long as California is a Third World country, Barrett said, we wont build $2 billion manufacturing plants here.” Other regions in the country are also in danger of experiencing California-style crises, Abraham warned.

Secretary Abraham held a press conference at the U. S. Chamber immediately after his speech. Over 60 reporters attended, but there was not a single question about the obvious conflict between the administrations energy policies and the Kyoto Protocol.

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