WASHINGTON, DC, Mar. 19�US Energy Sec. Spencer Abraham said Monday that the Bush administration would issue its energy strategy recommendations in a few weeks.
Abraham outlined the general policies underlying that strategy in a talk at a US Chamber of Commerce energy summit. Abraham was due to deliver an interim report on energy policy changes when President George W. Bush met with his energy task force later today.
Abraham told the chamber the administration would offer legislation to implement its policy proposals. That bill is expected to be more moderate than the one Sen. Frank Murkowski (R-Alas.) has filed (OGJ, Feb. 26, 2001).
The secretary expressed dismay at the Organization of Petroleum Exporting Countries�s decision to reduce collective production by 1 million b/d on Apr. 1. He said the administration would continue quiet diplomatic negotiations with OPEC nations (OGJ Online, Mar. 17, 2001).
Earlier, Abraham had said, �In light of the current world economic conditions, OPEC�s decision to cut their oil production quotas is disappointing. OPEC�s decision demonstrates the importance of increasing America�s domestic production and developing a national energy policy that will ensure a stable, reliable, affordable, and diverse supply of energy.�
Abraham said the US faces a major energy supply crisis over the next 2 decades. He said demand for energy is rising, particularly for natural gas and electricity, but supplies are limited by regulatory decisions. In particular, he said the US energy infrastructure is inadequate to meet future needs.
He said, �Our national energy policy will be comprehensive. It will reach across every (government) department that touches the energy market: from the Interior Department and the Environmental Protection Agency to the Transportation Department and the Energy Department. Our national energy policy will be hemispheric: it will be based on the understanding that our policy cannot stand in isolation from our neighbors throughout the Americas.�
Abraham said the strategy �will be founded on the understanding that diversity of supply means security of supply, and that a broad mix of supply options�from coal to windmills, from nuclear to natural gas�will help protect consumers from price spikes and supply disruptions.�
The secretary discussed several �myths� regarding energy. He said one is that �government subsidies and tax breaks are the best way to encourage new exploration and production of energy.
�This administration will continue to support funding for research and development initiatives. But capital is best allocated to its highest uses, through the working of the free market, not manipulation of the tax code.
�Government regulatory policy should not be aimed at picking winners and losers in any market, including energy. But neither should tax policy.�
Abraham said another myth is that �price controls are the answer to today�s energy crises.�
He said, �Let me remind everyone, America imposed price controls on oil and gas in the 1970s. They were an utter failure. They led to shortages and rationing and the idea that America was gripped by malaise.
"Let me be clear; the Bush administration does not support price controls. Price controls on electricity will lead to more blackouts. Price controls on gasoline will lead to gasoline lines. Prices controls will deepen America�s energy crisis because they won�t reduce demand, but they will cripple incentives for desperately needed investment for energy supplies.�
