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CNN Live Sunday

Country Divided on Energy

Aired May 13, 2001 - 17:01   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.
STEPHEN FRAZIER, CNN ANCHOR: We're going to begin today with plans by the Bush administration to head off potentially greater problems with energy and energy supply. This week the president formally unveils his strategy for dealing with the country's growing energy dilemma. The proposal addresses both supply and demand, and it's likely to generate considerable debate.

A preview now from CNN White House correspondent Kelly Wallace, at the White House now -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Well, Stephen, the Bush administration has invited labor unions to the White House tomorrow and will be meeting with other groups, such as environmentalists and senior citizens, to talk about President Bush's energy plan before Mr. Bush formally unveils his ideas on Thursday in Minnesota.

But Mr. Bush is saying his plan will only offer long-term solutions, a mixture of conservation and production -- the president saying there are no short-term fixes to deal with rising gas prices and power shortages in California. But California's governor Gray Davis disagrees, and he is calling on the Bush administration to impose temporary price caps on energy prices in his state and in other parts of the West.

The governor says that energy companies in Texas and in parts of the Southwest are gouging consumers. So he wants the federal government to step in. One Democratic lawmaker says that the president, a former oilman, should call in oil industry representatives and offer them an ultimatum.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (D), CONNECTICUT: You know, the president ought to call in his former colleagues from the oil industry, sit them down at the table and say: Look, this is wrong. Draw a line somewhere. We don't want to have to legislate here, but if don't charge more reasonable prices we're going to have to put some kind of price control on.

(END VIDEO CLIP)

WALLACE: But the Bush administration says price controls are absolutely the wrong way to go and they won't help California. Aides say that basically controls would be the wrong thing to do because they would discourage supply at a time of escalating demand. And most Republicans seem to agree with that.

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG (R), IDAHO: Price caps send a negative signal to the investment market. We've got to put billions of new dollars into technology and into new production. And you don't say to the investment community: You're not going to have a margin or we're going to control you and how we shape you.

We need to limit it, but we need to conserve and we need to produce, and we need to send all the right signals.

(END VIDEO CLIP)

WALLACE: Some Democrats are calling for the president to have the Federal Trade Commission investigate rising prices and what they say are record profits by the oil industry. The White House says the president has directed federal agencies to be vigilant to make sure there is no price gouging going on -- Stephen.

FRAZIER: At the White House, Kelly Wallace. Kelly, thank you.

More on the president's plan now from Ron Brownstein, who is Washington bureau chief of the "Los Angeles Times." And Ron, you wrote this week that one of the significant elements of both discussions, both Democratic and Republican plans, is that nobody's asking Americans to sacrifice anything for energy.

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, you know, you heard the president's radio address yesterday. It really was a reflection of that. Both sides in this debate at this point are treating conservation as something done for consumers rather than by consumers. In fact, they're more likely to talk about energy efficiency, which implies technical and engineering solutions to demand problems, rather than conservation, which implies people changing their lifestyle.

In California you've had public officials rather reluctantly, but eventually reaching the conclusion that prices had to go up to discourage demand and consumption. We're not really seeing any of that from either side, strikingly from the Bush side, which is talking more about production and conservation. Even the environmentalists, though, very careful to try to avoid seeming as thought they're telling people they can't have their SUVs or their very large houses in this debate.

FRAZIER: Well, why would they be afraid of saying that? I mean, it makes a lot of sense. What's the downside to that?

BROWNSTEIN: Well, the downside I think is the ghost of Jimmy Carter in the 1970s. When Carter introduced his energy plan a few months after taking office, the tone was very different than what we've heard out of Dick Cheney and Bush over the last week. Carter said: This plan will demand sacrifice and inconvenience in every life.

And they had a lot of thorny ideas in there to try to discourage energy consumption. Right now I think you have both sides, after a decade in which American life really has been defined by abundance on almost every turn, whether it was energy or federal revenue or jobs. Both sides I think have grown somewhat reluctant of asking hard choices of the public.

FRAZIER: And yet you, in your analysis, though, that you added in your writing, noted that although a lot of appliances have gotten more efficient, a lot of house are more effective now with insulation -- even though there's much more efficiency in American life, the consumption of energy is way up.

BROWNSTEIN: It's up per capita. You do have to wonder if technology alone can really solve all of these problems if there really is a long term mismatch between demand and supply. Look at houses. Houses built in the '70s use less energy than houses built in the '60s. Houses built in the '80s use less energy than houses built in the '70s. But houses built in the '90s are using more energy than houses built in the '80s, largely because they are so much bigger.

Same thing you're seeing on the roads. There's a larger and larger share of the overall fleet becomes these light trucks and SUVs. Miles per gallon, on average, are down. It peaked in the late '80s. So you do have to wonder if technology alone can really solve these problems. It's something neither side, though, very much wants to talk about at this point.

FRAZIER: And that's the point you make in your article. Nobody wants to be in a position of telling Americans they can't have something. But doesn't that seem immature?

BROWNSTEIN: Well, right now we're looking at technological fixes on the one hand, from the environmentalists and to some extent Bush, and then a production push on the other. What's interesting to me is that if this debates plays out the way it's going, it tends to reinforce the division we're already seeing in the country. I mean, look at the places where we produce energy. Those are the inland states and the South and the mountain West where Bush is already strong. He won 13 of -- 12 of the 15 states that produce the most oil in America.

The environmentalist sentiments are strongest in the coastal states, where Bush started off the weakest. I think this issue may play out a lot like guns or abortion or some of the other social issues rather than economic issue -- it tends to sort of exacerbate the cultural chasm that defines a lot of American politics these days.

FRAZIER: A cultural chasm we see spelling out in a geographic way. Ron Brownstein, thanks for spelling that out for us today.

BROWNSTEIN: Thank you.

FRAZIER: Talk to you later.

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