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CNN Novak, Hunt & Shields

Spencer Abraham Discusses Bush Administration's Energy Policy

Aired June 30, 2001 - 17:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ROBERT NOVAK, CO-HOST: I'm Robert Novak.

Al Hunt and I will question a top official in charge of President Bush's energy program.

AL HUNT, CO-HOST: He is Secretary of Energy Spencer Abraham.

(BEGIN VIDEOTAPE)

HUNT: (voice-over): President Bush sent Congress his energy program this week and launched a campaign to convince Americans that energy supplies must be expanded.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's about time an administration came up and told the truth to the American people and laid out a common sense agenda to make sure the great future of this country is as bright as it possibly can be.

(END VIDEO CLIP)

HUNT: But the newly installed Democratic majority in the Senate was in no hurry to act on energy legislation.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: I don't think we'll have to speed it up. I don't know that you need to go any faster than what we're currently planning.

(END VIDEO CLIP)

HUNT: Spencer Abraham spent the last six years as a U.S. senator from Michigan before being defeated for reelection last year. He then was named by President Bush as the nation's 10th secretary of energy.

A Harvard Law School graduate, Abraham at age 30 became Michigan's Republican chairman. He later served as deputy chief of staff to Vice President Dan Quayle and co-chairman of the National Republican Congressional Committee prior to his successful 1994 campaign for the Senate.

(END VIDEOTAPE) HUNT: Mr. Secretary, wholesale electric prices in California have plummeted. Gasoline prices are down 16 cents a gallon from a month earlier. The latest global assessment by British Petroleum says we have an abundance of oil and gas. Is the energy crisis over?

SPENCER ABRAHAM, U.S. SECRETARY OF ENERGY: Well, it shows you that our administration has been pretty effective with all those positive developments. But the energy crisis isn't over. And just because we have abundant supplies of reserves around the world, and especially here in the United States, we still have to extract those supplies and we still have to distribute them through an infrastructure that's very old and antiquated.

And unfortunately, we've got to make some changes that will require us to enact new policies to be able to deliver affordable, plentiful supplies of energy. And we've got to do that soon.

HUNT: Why do you think we've had these encouraging price reports in the last month, both of gasoline prices and electricity in California?

ABRAHAM: We had actually predicted at the Department of Energy that gasoline prices were peaking just before Memorial Day. That actually is a typical pattern, because as we go into the heavy demand season, prices sort of go up because supplies start to shrink. Inventories are being built up. That's a typical pattern as well.

The problem is, the long-term picture shows us becoming more energy-dependent on foreign imports. It also suggests that we don't have enough refinery capacity in this country to continue to supply energy at the prices that Americans want to pay. And that's why our energy plan makes sense.

I think our energy plan's introduction also has played a role in terms of generating lower prices. People see that we're moving in the right direction on energy.

HUNT: Well what do say when some people from California say who I talked to this week. They say out there, there's a public limelight -- spotlight if you will -- the semi-price controls that FERC put on spot markets, which you opposed; the conservation efforts which the vice president belittled. Is that what's going on in California?

ABRAHAM: No. You know, California's got a great conservation record, but they haven't built any new energy supply for the last 10 years, Al. And that's what causes them to have shortages, which has resulted in blackouts. And if we take that approach -- conservation only, no supply increases -- then the energy shortages of California will start to engulf other parts of the country.

Our plan is balanced with conservation as well as new supply. We need both.

NOVAK: But in Los Angeles this week, Secretary Abraham, Governor Gray Davis said that, quote, "In less than two weeks, we will put 1,300 megawatts into the grid -- more than was put into the grid in the 12 years before I was governor and more power than necessary to power all the homes in Los Angeles," unquote. Those 12 years had Republican governors in California. Is he...

ABRAHAM: There are plenty of folks in California who were in charge during this past decade when no new supplies were generated. We don't pin the blame on any one party or one governor.

NOVAK: But he's saying they've turned the corner because of his activities.

ABRAHAM: Well, by turning to increased production, that's a good sign. And we have worked with the governor to expedite permits so that new electricity can be brought into play. But there's still a lot of gap to be made up, and it's going to take, I think, a long-term effort for California to meet its long-term demands.

NOVAK: But you commend him for what he's doing.

ABRAHAM: Absolutely. We favor more supply. And I think that's the policy that the whole country needs -- more supply as well as more conservation.

NOVAK: Mr. Secretary, the Democratic leadership of the Senate doesn't act as though there is still an energy crisis. There's no hurry, as we showed earlier, to Senator Daschle moving on the energy bill. Now, you know the Senate probably very well, being there for six years.

Do you think it would be a good idea as some Republicans talk about to hold up the appropriations bill to force action on the energy bill? Is that biting off your nose to spite your face?

ABRAHAM: But we need action on energy. I wouldn't want to give advice to Trent Lott and the Republicans. They know the process now. I'm not part of it any longer.

But we can't afford to just decide there's an energy crisis, that the price of gasoline spikes or if there's a momentary low in prices with electricity. This is a long-term problem. If we don't act on it soon, the problems will get worse and we need action this year.

NOVAK: One more point on this is the members of Congress have been voting against an active energy program left and right. Day after day, Republicans reflecting on drilling in the Great Lakes, drilling in the Gulf, in the monuments. Are you using the arguments that members of your own Republicans in Congress on additional drilling?

ABRAHAM: Well, I'm concerned about those votes. I mean, you know, we've been accused of having a policy that emphasizes too much supply, and I don't think that's a fair accusation. We've got a lot of conservation programs in our energy plan.

But these actions in Congress suggest no new energy supply. Every single source of energy is being voted down. And if Congress continues moving in that direction, then they really jeopardize, I think, the long-term energy security of the American people.

HUNT: Mr. Secretary, let me go back to California. There are, as you know, widespread reports of market manipulation by some of the energy companies. There was a memo -- a private memo of El Paso Natural Gas, which talked about its ability to influence the market, quote, "to the benefit of any financial head's position," end quote.

Do you think there's a prima facia case of a conspiracy to drive up prices?

ABRHAM: I don't know that there's a prima facia case. What I think is that these investigations, which the Federal Energy Regulatory Commission's engaged in should go forward. We certainly don't support the charging of unjust or unreasonable prices. We want a market system to work in California and the rest of the country, and we will support enforcement actions against those who undermine such a market.

HUNT: To clear the deck and to look at the future, would you be supportive and encouraging of any deal whereby the criminal investigations were dropped and returned for multibillion-dollar refunds to California consumers?

ABRAHAM: Well, actually, if people have engaged in unjust and unreasonable charging, then I think those charges should be refunded, regardless of what happens on the criminal front. And I believe Federal Energy Regulatory Commission has a duty, and they're fulfilling it.

Interestingly, only since an appointee of President Bush has chaired FERC have we started to see refunds be ordered. All these excessive charges took place before came into office, or least a large amount of them. And yet, there were no actions by the previous administration to go after the generators to order refunds, and I think the administration deserves some credit for that change.

HUNT: Mr. Secretary, you have a statutory responsibility to determine the scientific basis for a nuclear waste repository at Yucca Flats in Nevada. You're going to make a recommendation to the president later this year. Now, it seems to me, using the program, you have made a heavy commitment to nuclear energy, regardless of what the scientific determination is on nuclear waste repository, is that correct?

ABRAHAM: Well, our position is that, in terms of the long-term energy security, we have to keep nuclear energy as an important part of the mix, at least providing the 20 percent of the electricity it does today and, ideally, even a little bit more. But there's no question, Bob, that if we don't find a way to deal with the nuclear waste, the ability to expand that industry, frankly, I think will be limited severely.

NOVAK: Would I be cynical in saying I think I know what you're scientific determination is going to be on the Yucca...

ABRAHAM: Yes, you would be. (CROSSTALK)

ABRAHAM: I will make a comprehensive, objective determination.

NOVAK: All right. We're going to have to take a break. And when we come back, we'll ask the secretary of energy whether big energy is too close too this administration in making a decision.

(COMMERCIAL BREAK)

HUNT: Mr. Secretary, "The Wall Street Journal"/CNN polls and others show a large public perception that wealthy interests have a disproportionate influence in this administration, including the making of energy policy. I'm sure you disagree.

But what possible justification is there, then, for Vice President Cheney to insist the public and Congress has no right to know with whom he discussed the formulation of an energy policy?

ABRAHAM: Well, the vice president is going to respond based on what is legally appropriate to any of these inquiries.

But I think that, you know, the president of the United States, the vice president, when they're deciding policy, I think should have the ability to talk to people about it without having every conversation a matter of public record, just in the interest of trying to grab as much information as they can.

And also I'm sure he's concerned about setting precedents that in another sense might be ones we would not want to establish.

HUNT: You know, gosh, I heard that exact same sentence almost eight years ago, but it was Republicans criticizing Hillary Clinton's refusing to divulge who she was talking to in formulating a health care policy, and we were told by Republicans she was hogging something. Why is Dick Cheney's stonewalling any different?

ABRAHAM: There's a big difference, I think, Al. First of all, the group of people making the decisions with respect to formulating this policy were all government employees. They were either Cabinet members or employees of the federal government; they weren't outsiders. So nobody involved in the decision-making was an outsider.

Second, we weren't putting together a bill. We were putting together a list of recommendations for the president's consideration. And that's a major difference, I think, between what we did here and what took place with the health care issues back in the Clinton administration.

NOVAK: Secretary Abraham, the public perception is that the United States has opted out of the Kyoto global warming treaty as inimical to our interests, but in fact we signed that treaty and we have never revoked our signature. Can you explain to me why the president, the government, just doesn't officially and formally revoke the signature so we don't have any obligations under the Kyoto treaty? ABRAHAM: Well, I'm not sure what the decision-making process is on that issue. As you know, the Congress and the Senate, at least when I was there, spoke overwhelmingly against Kyoto, voting on two occasions by overwhelming margins against the essential components of it. And the president has made it clear that we're going in a new direction.

Whether there's a plan to do anything with respect to revoking a signature, I can't tell you at this time.

NOVAK: What makes that pertinent, sir, is that, at this very moment, representatives from the U.S. government are negotiating global warming provisions in The Hague with representatives of Europe and Japan. So this is still going on.

Can you explain to me how we are still negotiating on the enforcement of a treaty that we have repudiated?

ABRAHAM: Well, all I can tell you is that the president's made it clear that the basic commitments that would be called for under Kyoto of the United States are not the policy of this administration.

NOVAK: Did you know they were in The Hague negotiating?

ABRAHAM: I'm not familiar with those negotiations. I can't speak to them directly.

But I think the president's made it clear that we're taking a different tact, a tact that's based on technology advances and research into climate change instead of one that puts the United States at a tremendous economic disadvantage with respect to the rest of the world, a treaty that wouldn't even be enforced in a variety of the countries which are major greenhouse-gas producers.

HUNT: Mr. Secretary, let me come back to nuclear waste. You are a big believer in states' rights. I think you were a member of the Federalist Society even.

NOVAK: Founder.

HUNT: Or one of the founders.

If the state of Nevada says that it does not want a nuclear waste site there, is it appropriate, given your philosophy, for the federal government to say, "We don't care. We're going to put it there no matter what you think"?

ABRAHAM: Actually, the state of Nevada has the power to veto the decision. And under the legislation, the federal government, through the Congress, can vote to override that decision. So Nevada's voice will be heard in a variety of contexts and certainly has been already.

HUNT: If they do vote to override, do you think it's appropriate for Congress to override the states' rights decision?

ABRAHAM: Well, I think that in this case there's a compelling national interest, because we have nuclear waste at over 100 reactors around the country, many of them close to huge population centers. It's building up.

And we have taken an obligation through laws passed by Congress to dispose of that waste. And failing to do that has already necessitated a variety of lawsuits against the federal government by all those different communities where these nuclear reactors exist.

It's got to be addressed somewhere. The decision to focus on Nevada was made by Congress back in the 1980s. It is the single site we're looking at, and I think the national interest is pretty compelling in this case.

HUNT: Let me switch to Arctic drilling. The Republican budget resolution, as you know, assumes no revenues from drilling in the arctic. A number of Republicans on Capitol Hill say it's dead, it's just not going to happen. Right? Is it dead?

ABRAHAM: It's an uphill fight.

We passed, I think, in the Senate last year when I and others were voting for it, people who are no longer in the Senate, only passed by I think two votes.

But people don't understand this issue. We're talking about the potential, I believe, in Alaska to offset 20 years of imports from Saudi Arabia, 70 years of imports from Kuwait, 50 years of imports from Saddam Hussein; and in a way that would, I think, be environmentally feasible without any disruptions or the ecosystem or of the species there.

And I think Americans have not heard the full debate on it. I hope when they do, that they will support our position.

HUNT: Mr. Secretary, it's been reported that the Bush Administration has asked scientists to look into the possibility of resuming nuclear testing in the underground in Nevada to test weapons. That's under your department, too. You have a big responsibility in your department.

Is the U.S. government really to the point now where, after all this time, nuclear testing is possible in the near future?

ABRAHAM: No. We're not considering that option. In fact, it would take years if we were to start today to even be in a position to resume testing. We're committed at this point not only to the moratorium, but to pursuing the science-based, what we call stockpile stewardship approach to determining the reliability of our nuclear stockpile.

The issue that's been raised and was raised during hearings in the past is whether or not we ever will be in a position to scientifically determine whether our stockpile functions.

Now, today that's not much of a problem due to the relative youth of the stockpile. But in the future, as some of these weapons systems age, there's a question. We're moving with a lot of resources to be able to do it scientifically without testing. That's a decision we have to continue to monitor.

NOVAK: Quickly before we take a break, Mr. Secretary, what is your position, the administration's position, and your position as a Michigan Republican, on raising CAFE standards -- the gas mileage standards for the American automobile fleet as an energy-conserving measure?

ABRAHAM: I think the president believes, and our energy plan suggests, that the secretary of transportation, as called for statutorily, should now make new recommendations with respect to CAFE, but that he should take into account a study which we put in place last year that's about to be released by the National Academy of Sciences, and he should also take into account the impact, relatively speaking, on both domestic versus foreign manufacturers, as well as the safety of passengers and vehicles, but that we should, in fact, have new recommendations that are administratively drawn on CAFE.

NOVAK: Higher standards or not?

ABRAHAM: Well, it's up to the secretary of transportation to make that decision. He's got a statutory framework to do it in.

HUNT: We're going to have to take another break. And when we come back, we'll have "The Big Question" for Spencer Abraham.

(COMMERCIAL BREAK)

NOVAK: "The Big Question" for the secretary of energy: Mr. Secretary Spencer Abraham, before your present life you were a political operative, so this question, I think, is pertinent for you.

The president, despite very great success on Capitol Hill in getting his tax bill and education bill through, a successful European trip, has been falling in the polls. "The Wall Street Journal"/NBC poll shows him at 50 percent, the worst presidential rating in five years.

What is he doing wrong?

ABRAHAM: I don't think he's doing anything wrong. I think his willingness to take on tough, controversial issues, to fight the fight for tax reform and education reform and energy policy, always is going to generate some opposition.

But I think in the long run the American people are going to be happy and are happy to have a president who's willing to confront some not necessarily popular topics and do what's right for the country. And I think that leadership will sustain his support as we move forward through the administration.

HUNT: Mr. Secretary, Ray LaHood is a Republican congressman from Peoria, Illinois. Now, that is middle America. As you know, he has a safe district, basically. He said the other day, I want to quote, "We need to a message to President Bush to be thoughtful rather than just rubber-stamping the idea of doing all this exploration. They" -- meaning you -- "need to rethink their position," end quote.

Why are you losing the Ray LaHoods?

ABRAHAM: Well, I think that there hasn't been a full enough debate on these energy issues because we've focused most of the president's and the administration's attention on tax policy, on education reform.

As this debate now comes more into the center stage, I think that people like Ray and others who have some concerns will see that our plan is balanced. It's not just an increase-supply plan, it's one that balances increases in supply with more conservation, more mix between traditional energy and renewable energy.

And I don't think that's gotten out there well, and I'll take responsibility. I probably haven't done as much as I should to make sure the members of Congress understand the full approach that we're taking on energy, the balanced approach.

HUNT: Mr. Secretary, thank you for being with us today.

Robert Novak and I will be back with a discussion in just a moment.

(COMMERCIAL BREAK)

HUNT: Bob, Spence Abraham is a good guy. He's politically savvy. But, you know, in the six weeks since this energy program was unveiled, it has gained no momentum. Indeed, it may have gone the other way, as your question about Republican defection suggests.

NOVAK: Al, I was surprised that Spence Abraham, as an old Capitol Hill hand, was so strong in saying that the Republican- controlled House of Representatives was voting against all these drilling provisions. They're not going to have energy if they keep voting against it. I thought he came over pretty hard.

HUNT: I'll tell you, one big mistake this White House is making and that's not telling us who Dick Cheney talked to, what special interests he talked to in putting this together. Spence Abraham tried to defend it, but that's not going to sell in Kalamazoo.

NOVAK: Maybe Mr. Abraham and the president should come out hard against the enemies of the energy program as people who want to change the way Americans live. They don't want you to live in your big house; they don't want me to drive my fast car. They just want to have us all in the little warrens, maybe driving horse and buggies.

(LAUGHTER)

I'm Robert Novak.

HUNT: And I'm Al Hunt.

Coming up in one-half hour on "RELIABLE SOURCES," how is the media covering author David Brock's admission he lied about the Anita Hill controversy, and the controversy over ABC's John Stossel's environmental report?

And at 7:00 p.m. on "CAPITAL GANG," Bush's mid-year crisis, the Microsoft decision and our "Newsmaker of the Week," historian David McCullough.

NOVAK: That's all for now. Thanks for joining us.

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