Interview with Energy Secretary Abraham

Interview with Energy Secretary Abraham

As he enters the final year of the Bush Administration's term Energy Secretary Spencer Abraham aims to fulfill the top priorities on President George W. Bush's energy agenda, including enactment of comprehensive energy legislation, which would promote production of conventional fuels, such as oil and gas, as well as corn-based ethanol, and order improvements in the US electricity grid. With Congress back in session, Abraham and Republican lawmakers are attempting to rescue the bill (HR 6), which stalled in the Senate last year after passing the House. Abraham also looks forward to a Department of Energy's (DOE) application for a proposed nuclear waste repository in Nevada, which the department plans to submit to the Nuclear Regulatory Commission (NRC) in December. In an interview with Platts Inside Energy Jan 27, Abraham discussed the likelihood of achieving those goals as well as the administration's view of world oil supplies. Following are excerpts of that interview.

Inside Energy: What is your top priority in Congress this year?

Abraham: Our goal, as the president said in the State of the Union address, is to pass a bill that modernizes the electricity system and accomplishes other missions we set out. It probably isn't going to include [oil and gas development in the Arctic National Wildlife Refuge], as you know, but we certainly hope other parts of the president's energy plan can be included, and they certainly are addressed in the current bill … .

IE: Will the legislation pass Congress intact or be broken up, with parts added to other bills more likely to pass, like a pending transportation bill?

Abraham: The discussion is not just confined to can we get the remaining votes on HR 6, it's the broader question of which is the best way to proceed at this point, and how does the transportation bill impact that, and what do we need to do in the context of the transportation bill to preserve not just the ethanol piece but other things as well … . There are lot of factors. You've got a lot of people with interests in different parts of the bill … .

IE: With the November national election looming, must Congress act on the bill sooner rather than later, when lawmakers will be eager to scale back on their workload and hit the campaign trails?

Abraham: There's always the possibility that it gets too late. … But I think that sometimes is an overrated sort of rule of thumb … . You can have events in the world quickly affect energy legislation. We've seen that [work] both favorably and, unfortunately, unfavorably. Bad events like a blackout cause people to suddenly say we should move on an energy bill, and then we've seen good things happen in the world, like essentially tranquility in the energy sector, cause the bill to slip to a lower priority. So I guess my instinct is that it's hard to say there's a timeframe because all it would take is higher prices than expected or some type of event, not necessarily even in the United States, that would put this back in play, even very late in the session.

IE: After years of planning and research, DOE intends to submit this December an application to the Nuclear Regulatory Commission for a license to operate a nuclear waste repository at Yucca Mountain in Nevada. DOE hopes to open the site in 2010. Given continued opposition to the program by Nevada and others, can the department meet those goals?

Abraham: We'll [submit the license application] if lawsuits and other things don't prevent us. Left to move ahead, we will get it done … . I'm sort of surprised [over the opposition] because the Nuclear Regulatory Commission will be the people who have the final say. They'll make the decision whether this is safe to be built. If people are so convinced there is any imperfection in this, they should be happy to have outside in-depth experts decide. I've always felt that the unwillingness of the opponents of Yucca Mountain to let it go to a neutral arbiter is in fact inconsistent with their claim that there is a problem with the project, and consistent with our view that we have done the science and research successfully. … The public through its elected officials has spoken and set up a process. My job isn't to debate the process at this point; it's to do our job here to prepare the license application and submit it. The NRC will make the call … . But right now what we have is nuclear waste being maintained in temporary facilities all over this country, extremely close to major population centers. And the people who say Yucca Mountain is not perfect somehow because it may or may not be able to protect [nuclear waste] for up to 10,000 years have presented, in my judgment, absolutely no compelling alternative approach.

IE: How concerned is the administration over current high oil prices?

Abraham: I've certainly commented on and the president has commented on the concern about having production levels at prices that hurt the world economy. We believe the market, as I've said a thousand times, I think, should be allowed to be the mechanism that sets price and production levels … . We feel a growing world economy is in the best interests of not only consuming countries but producing countries, as well … .

IE: In light of the high prices, would DOE consider deferring deliveries of oil into the US Strategic Petroleum Reserve?

Abraham: We deferred deliveries into the SPR when there was actually a significant supply disruption last year when Venezuela [oil production] was down. Today [the world] is producing 4 million more barrels of oil a day than it did a year ago … . So, there's not a supply disruption that's involved here. And, we obviously don't subscribe to the notion that some have raised that somehow this tiny amount of oil going into the SPR is having a huge impact on prices. I don't think it is … It's a small amount … . Again, the purpose of the SPR is not about price, it's about national security. And nothing has changed to suggest we shouldn't have a very ample and strategic reserve available to meet any kind of national security challenge we might face.

Updated: Feb 2, 2004