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American Morning

Administration Criticized for Lack of Help in Energy Crisis

Aired May 08, 2001 - 10:01   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.
LEON HARRIS, CNN ANCHOR: For most Americans, the power concerns are as close as their corner gas station. For Californians, the crisis truly hits home, lurking as close as that dead light switch in the house. But what is the view from the White House? CNN senior White House correspondent John King conducts our one-on-one interview with Dick Cheney later on this hour.

John checks in now with a preview. Good morning, John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Good morning to you, Leon. Well, some short-term problems facing the administration. Criticism that it's not doing enough to help California; criticisms from some that why won't it do something to help those rising prices at the pump.

The president's spokesman saying yesterday no quick fixes here, and that the president wants to invest and hopes the American people will pay attention to a long-term strategy the administration will release next week. The vice president has been the point man on that. The task force is finishing up its work.

We know, and we want to ask the vice president for more details, but we know this report will call for increasing supplies of oil, building new refineries, building new pipelines, more power to the coal industry.

So, we want to talk to the vice president about those long-term plans, but also, as well, about the short-term politics of this. Is the administration willing to endure a summer of criticism? There's been Some criticism from lawmakers in California, including some Republicans that the administration could do more.

This a very major issue for this administration, and it will be quite a controversial plan. It will be unveiled by the president late next week. But we're hoping the vice president will share a few more of the details with us today.

HARRIS: All right, good deal, John. We'll check back with that and more in just a few moments -- Daryn.

DARYN KAGAN, CNN ANCHOR: One of the issues that are bugging, especially Californians, an early blast of summer turned up the temperatures and turned off the lights around much of California yesterday. More than 100,000 homes and businesses were left without power in the state's first wave of rolling blackouts since March. But it may be just an omen of a long, prickly and difficult summer ahead.

CNN's Rusty Dornin is with us with the latest. Rusty, good morning.

RUSTY DORNIN, CNN CORRESPONDENT: Good morning, Daryn. Well, just about in California has had a taste of what it is like to get the lights shut off. There are 14 different regions. We are in the last stage of region 14. If we have blackouts today, it will probably go back to region one and will start all over again.

Now, we're here at the Valero Oil Refinery in Benicia near San Francisco. Now, Valero and the 60 or so other refineries in California, up until now exempt. They call it Block 50. They've been exempt from any blackouts, but as of last month, the Public Utilities Commission said they will be subject to having the lights turned off just like everyone else, and that could drive a hard lesson home to California motorists about the laws of supply and demand.

(BEGIN VIDEOTAPE)

DORNIN (voice-over): The product from here goes here, but if California's rolling blackouts hit the state's oil refineries, drivers already digging deep for fuel will see the impact here.

UNIDENTIFIED MALE: Skyrocketing gas prices -- $3 a gallon is the number we have to think about if we have a lot of blackouts, and those refineries are going to go on and off-line all the time.

DORNIN: The state's gasoline producers were told in April, expect to be part of the rolling blackout list. Here at the Valero plant in Benicia, near San Francisco, there are no back-up generators. The same is true of about one-third of the state's power plants.

SCOTT FOLWARKOW, VALERO ENERGY CORPORATION: Normally, it takes us a couple of days to shut down a plant. We can shut it down relatively fast, however, the faster we go, the more questions we have about the damage you do to the process equipment during that rapid shutdown.

DORNIN: Damaged equipment means plants might not be able to turn the power back on when a temporary blackout is over.

FOLWARKOW: You could ultimately be down for many days to many weeks as you try to get the system back up.

DORNIN: Ten percent of California's clean burning fuel comes from this plant. A shutdown for days or weeks could mean short fuel supplies, sure to drive prices even higher. Health and safety reasons keep the lights on at hospitals and emergency agencies, which are exempt from blackouts. Economic arguments about skyrocketing fuel prices fall on deaf ears when it comes to the state's Public Utility Commission.

CARL WOOD, CALIFORNIA PUBLIC UTILITIES COMMISSION: If we exempt everybody from rolling blackouts, the electrical system would collapse, and that's a much worse catastrophe than anything else we're facing at the present time.

DORNIN: California legislators are considering a bill to exempt refineries from power cutoffs.

(END VIDEOTAPE)

DORNIN: Now, things are going to heat up again today in California. We are in a warning stage. Rolling blackouts are possible. Gasoline producers warn that if more than one refinery goes down for an extended period of time, electricity won't be the only energy source in short supply -- Daryn.

KAGAN: Rusty, are they getting better with the blackouts and giving people some warning?

DORNIN: It depends because at time, you get into a Stage 3, it can go very quickly from Stage 2 to Stage 3 and into blackouts. Sometimes they have -- they're trying to get the warnings out when the stages first begin, so that people can starting conserving, turn the lights off and we can avoid the rolling blackouts completely.

KAGAN: Rusty Dornin, in Benicia, California. Thank you.

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