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Will Bush's Energy Plan Lower Prices at the Pump?

Aired May 17, 2001 - 19:30   ET



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: But if we fail to act, this great country could face a darker future.


ROBERT NOVAK, CO-HOST: Tonight, President Bush's energy plan. Will it help lower prices at the pump, will it keep the lights on in California, and why don't Democrats like it?


REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: It's slick, it's full of pretty-colored pictures. It really looks like the ExxonMobil annual report, and maybe that's really what it is.


ANNOUNCER: Live from Washington, CROSSFIRE. On the left: Bill Press; on the right: Robert Novak. In the CROSSFIRE: Republican Congressman Billy Tauzin of Louisiana, chairman of the Energy and Commerce Committee; and Democratic Congressman Robert Wexler from Florida.

NOVAK: Good evening. Welcome to CROSSFIRE. The politicians who asked what President Bush was going to do about rising prices at the gasoline pump and the rolling blackouts in California got their answer today. The glossy, 163-page Bush energy policy with color pictures was released this morning, and the president was off to deliver his message in person in Minnesota and Iowa.

He is advocating more conversation proposals than might have been expected, but he puts heavy emphasis on increasing the supply of energy: coal, nuclear, oil production, oil refineries. The president's policy entails 105 separate proposals.

But Democrats in Congress turned them down flat. And the Greenpeace environmental warriors apparently didn't like it either, dumping a truckload of coal in front of Vice President Cheney's residence. Now that the Bush energy plan is out, question is whether this will alleviate the energy shortage long range, and this summer's high prices and low supplies short range -- Bill Press. BILL PRESS, CO-HOST: Congressman Tauzin, good to see you on CROSSFIRE. President Bush went out to unveil his plan today at a turkey manure plant, which I think sort of sums up the entire plan, beginning with this so-called crisis.

You know, former President Jimmy Carter in the "Washington Post" this morning spoke about this crisis. I'd like to read you just a little bit of what the former president had to say, quote: "No energy crisis exists now that equates in any way with those we faced in 1973 and 1979. World supplies are adequate and reasonably stable, price fluctuations are cyclical, reserves and plentiful and automobiles are not waiting in line at service stations." Isn't it true? This whole crisis has just been manufactured to give the oil companies whatever they want?

REP. BILLY TAUZIN (R), LOUISIANA: You spooked us out. That's exactly it.


PRESS: End of show!

TAUZIN: Gasoline prices are not rising, there are no blackouts in California, it's all made up, it's all fake. We're not shutting down petrochemical plants in Louisiana because the price of natural gas is too high. Farmers are not going to face incredibly high prices for fertilizer next year, because we're not manufacturing ammonium and nitrogen anymore at those plants. No, we don't have a crisis.

What we have is a crisis that's about to explode on this country, and if we don't start thinking about it as rational human being instead of demagoguing it, we are going to be in trouble.

PRESS: Well, Bob said, you know, that those who are looking for some answers to high gas prices or to rolling blackouts in California got their answer today from George Bush. The answer was nothing! You know the problem in California: it's a stupid deregulation bill they passed. They need some price caps out there on electricity charged by these big energy companies in Texas. Nothing in this plan for that.

I'd like you to listen to what the governor of California had to say about it today. Here he comes, Governor Gray Davis.


GOV. GRAY DAVIS (D), CALIFORNIA: Again, Mr. President, I know you have a lot on your plate. But this issue started well before I became governor, it started well before you become president. And by not doing anything, you're allowing price-gouging energy companies, many of whom reside in Texas, to get away with murder.


PRESS: Nothing about energy prices. Why not?

TAUZIN: Because price controls by government give you shortages. California tried it. They controlled prices at the retail level, they controlled prices at the wholesale level, there were price caps in California which they ignored themselves, because they couldn't buy energy at those polices.

They've got shortages, they've got higher prices, and why? Because they didn't deregulate, they only regulated. They regulated with price freezes.

We tried that in America. Jimmy Carter gave us price controls on natural gas. Remember what it gave us? Shortages, shutdowns, a horrible situation in parts of the country where factories couldn't operate and people went unemployed.

Price caps? Prices caps mean shortages, less energy. Guess who says so? The head of the California ISO, the purchasing authority, said price gaps will mean more blackouts, not less blackouts for California.

NOVAK: Congressman Robert Wexler, welcome. Now, I would think, since you're a fair-minded person -- and have you read all of this, by the way? I just want to get you...

REP. ROBERT WEXLER (D), FLORIDA: I've got a real good feel for it.

NOVAK: Did you lift it instead of reading it? Is that how you guys feel?


WEXLER: The part that really disturbs me is they part where they didn't take oil drilling off the coast of Florida out of their plan.

NOVAK: All right, let me just ask you this. There's a lot of governmental interference on the markets here. Boy, I wasn't sure whether this was a Republican or a Democratic proposal, and there's a lot of conservation, giving tax -- $5 billion in tax credits if you buy a car. If you're just a fair-minded person and not a partisan, you should be jumping up and down over this proposal, shouldn't you?

WEXLER: Bob, there's very little conservation in this plan. This is a plan that is basically drill, drill, drill, mine, mine, mine, consume, consume, consume, with very little attention paid toward renewable energy sources.

But probably most pressing: almost no attention paid to the short-term problems that Americans are having in their electricity and in their gasoline. Why aren't we talking about rescinding the gasoline tax? 18.4 cents we could take right off of the bill today. But -- and at the same time, let's not harm highway projects, let's take it right out of the 1.3 trillion. That's a tax cut that real Americans can see next week, not 11 years from now.

NOVAK: Anything that cut into the tax cut -- Congressman Wexler, you are -- I could answer you on conservation, but I am going to have somebody else answer you, George W. Bush. Listen to this. (BEGIN VIDEO CLIP)

BUSH: California has been an impressive conservation leader. It is the second most energy-efficient state in the union. But California has not built a major new power plant in a decade. And not even the most admirable conservation effort could keep up with the state's demand for electricity.


NOVAK: Congressman, Governor Gray Davis corrected the president -- the president said that today, and Gray Davis says, no, it's not the second most efficient, it's the first most efficient. First most efficient in conservation? They're having all this trouble? It shows that conservation doesn't help that much, doesn't it?

WEXLER: No, conservation alone will not solve the problem.

NOVAK: Oh, hallelujah!

WEXLER: Just like drilling alone will not solve the problem. We need to have more supply. There's no doubt about that, but it can't be supply that totally jeopardizes the environment, it can't be supply in the form of drilling for oil off of Florida or breaking up the Alaska Wildlife Reserve.

NOVAK: Do you live in Florida on the coast there?

WEXLER: I live in Florida...

NOVAK: So, you're not an unbiased source, are you?

WEXLER: Well, I think the 15 million Floridians that heard president, candidate George Bush promise Florida he wouldn't drill off the coast of Florida, and now his Interior secretary says it's still on the table. President Bush broke his word to Florida.

NOVAK: I hope it's on the table.

PRESS: Getting, congressman, back to Bob's opening, those who were waiting for an answer on gas prices got their answer today, also the answer, again, being nothing. Congressman Wexler just mentioned one possibility, cutting the gas tax. Doesn't seem to be on the table.

Senator Schumer mentioned another possibility. I'd like you to listen to this one. Why not? Here's Senator Schumer.


SEN. CHARLES SCHUMER (D), NEW YORK: What should the president do in terms of gasoline? Well, first and foremost, I believe he should put the selling of oil from the strategic petroleum reserve back on the table.

(END VIDEO CLIP) PRESS: Back on the table. Gas prices problem last year, Bill Clinton opened up the strategic reserves.

TAUZIN: Bill Clinton said he was gouging, remember?

PRESS: This year, George Bush says he can do nothing! Why not?

TAUZIN: Remember he said he was gouging? And he send Richardson and Browner and he sent Chairman Pitofsky of the FTC to check out those horrible gouges. You know what they found? Broken pipelines, a stupid government policy on boutique fuels in Chicago and Milwaukee. They found government failure in creating the problem in Chicago and Milwaukee.

You know what else we found? We found we haven't built a refinery in American since 1976. It was built in my district. The last one built was in Garyville, Louisiana. The last new refinery in America, 1976! And you wonder why we have high gas prices? Let me tell you in a nutshell why we do: we depend on somebody else to do it for us. They set the price, instead of Americans setting the price.

WEXLER: But wait, there's one major thing we are not talking about right now.

TAUZIN: Well, let's talk about it!

WEXLER: The major energy companies in the last six months have -- what -- gone up in their profits 50 percent? Why isn't the president calling for an investigation be done by the Federal Energy Commission, be done by his own attorney general where are all these profits coming from? The price oil is only $28 a barrel.

TAUZIN: Last week there was a report issued on the prices in the California three years ago, which Clinton said were price-gouging again. Last week, they admitted there was no such thing happening.

Let me tell you the problem. Refineries are operating at 98 percent capacity, Bill, Robert, 98 percent capacity. You can take all the oil out of the strategic petroleum reserve, and you couldn't have any place to refine it in America. There are no refineries to refine it.

PRESS: But congressman, with all due respect, every time we raise the issue of gas prices, you want to go off and talk of these long-range, we got to build a refinery. Fine! Build a new refinery. You're not going to build it this summer. I'm asking you about two things, and you refuse to answer! Number one, why not strategic oil reserve? Let me add another one: Why not calling OPEC, which on April the 1, just a little over a month ago, cut production by a million barrels a day, not one peep out of the Bush White House, which slammed Clinton last year for not calling OPEC?

TAUZIN: That's a typical response. Let's get our enemies to produce energy for us. I answered your question on OPEC, I mean on the strategic petroleum reserve. Let me answer it again. We're at 98 percent refinery capacity, bill. You could suck all the oil out of the strategic petroleum reserve in Louisiana and Texas. There's no place to refine it.

WEXLER: Mr. Chairman, wait, don't we remember then-Candidate Bush's chiding of Vice President Gore, and he said, "You guys should be on the telephone. You should be calling Kuwait. You should be demanding that they up their production." Well why hasn't the president done that? There's nobody better qualified than this president.

NOVAK: The answer is that he was wrong then and he's right now. But let me say just one thing. There's been so much debate about whether we should drill in the Arctic National Wildlife Refuge, and, you know, disturb the fuzzy animals there. I don't want to get into that stuff. But the argument that -- the silliest argument -- is that there's no oil there.

And President Bush in a speech today put that to rest. I'm sorry, did he put it to rest? Yes, he put it to rest. Let's listen to him.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ANWR can produce 600,000 barrels of oil a day for the next 40 years. What difference does 600,000 barrels a day make? That happens to be exactly the amount we import from Saddam Hussein's Iraq.


NOVAK: Now, isn't it ridiculous, when we're talking about an area about twice the size of Dulles International Airport in this huge wildlife reserve, the size of South Carolina.

TAUZIN: Let me give you the numbers. It's 2000 acres out of 19.6 million acres. You know what that is? That's one 100th of 1 percent. That means you don't touch 99 and 99 100th percent of ANWR.

NOVAK: Forty years, 600,000 barrels a day. What do you say to that?

WEXLER: It's not that simple, I've been up there. You are going to have all these pipelines...


WEXLER: I don't doubt that -- you are going to have all these pipelines going through. You may ridicule wildlife, but some of us believe it's very important. It's the last pristine spot in the country, and the return that you are going to get isn't going to be worth the environmental danger.

NOVAK: What about the 600,000 barrels, 600,000 barrels a day?

WEXLER: And we could get far more with conservation, we could get far more by drilling for oil where we're already drilling.

NOVAK: You just want, you and all the greenies, just want me to get out of my Corvette. You want the people not to have nice cars to drive, and isn't that true?

WEXLER: No, but what I think we ought to do is produce air conditioners and watching machines and other home appliances...`

NOVAK: Just reduce the quality of life.

WEXLER: And how about something real unique. Why don't we ask the manufacturer of cars to make a more efficient engine when they can do it? Let's stand up to industry...

NOVAK: I like my inefficient engine, how about that?

PRESS: Wait a minute, I want Robert Novak to ride to CNN on his bicycle. That's what I want.

TAUZIN: I want to see that show.

PRESS: Yes, I want to see that show, too. All right, hey, the debate is going to continue with all of you. Chairman Billy Tauzin's agreed to be, to stay around on our chat room at right after the show. When we come back, big question, like it or not, is there a nuclear power plant coming to your neighborhood?


PRESS: Welcome back to CROSSFIRE.

Over 100 recommendations in the president's energy plan. But none will stir more debate than his proposal to reconsider nuclear power as part of the answer to today's energy problems. No nukes OK'd in this country for 25 years. Is there a good reason? Or is nuclear power now a safe, clean solution?

Our debate on energy continues tonight with two members of Congress. Billy Tauzin, Republican of Louisiana, chairman of the House Energy and Commerce Committee. And Robert Wexler, Democrat of Florida. Bob?

NOVAK: Congressman Wexler, I'm afraid some members of Congress think there is no nuclear power in this country. Right now, 20 percent of the electric power needs of the country are provided by nuclear power. There's 103 reactors in the country since the Three Mile Island incident in 1979. There has not been one safety problem.

And although there has been no nuclear reactors built, there has been no problems. It's been clean, safe, increasingly economical. What's the reason, then, not to build more reactors? There's 20 percent of our supply now,

WEXLER: Well, I think it's 22 percent. And you're right, it has been clean, it has been efficient since the extraordinary disaster. But the reason why there's some...


WEXLER: The reason why -- the reason why there's some delay or caution is that we still do not have a credible way to get rid of the nuclear waste. Until we figure out a way to get rid of the nuclear waste, whether we are going to do it in Nevada or someplace else, we better be mindful of the fact that if you are going to go out and build a whole lot of new plants or increase the capacity in the current plants, you could be sitting on a lot of nuclear waste.

NOVAK: Three Mile Island wasn't a disaster. Chernobyl was a disaster. Nobody died at Three Mile Island.

But Congressman Wexler, the Congress -- in 1987, was it? -- authorized the Yucca Mountain former nuclear testing area in Nevada as a -- as a depository. The reason that it hasn't been put into effect is the gambling industry. It's 90 miles from Las Vegas. They are afraid it will upset big rollers like Bill Press, and they won't go to the craps stable. Are you right around by the nose by the gambling industry?

WEXLER: No, I happen to support building this kind of a nuclear waste facility. However, Bob, let's not ridicule Las Vegas. Whatever you think about the gambling industry, millions of Americans enjoy vacations in Nevada, and if you're saying that we should just expose millions of Americans to some nuclear risk....

NOVAK: That's not dangerous! It's buried deep. Didn't you know that?

WEXLER: The point is, we don't have a plan yet in which to bury it.

NOVAK: Yes, we do. Yucca Mountain.

WEXLER: Hasn't been passed. The Congress hasn't passed it; the president hasn't signed it. When they do that, then it will be another story.

NOVAK: Are you supportive?


PRESS: I want ask you, Congressman, if I could shift to what...

TAUZIN: I want to hear you say no new nukes again.


PRESS: At least, I'm pronouncing it nuclear.

I want to ask you about the scariest part of this proposal, which I don't think is the nuclear power plant, actually. I think it's two other words: eminent domain. Under this proposal, the president -- the vice president recommend new authority to the Federal Energy Regulatory Commission to go out and seize property and say, here is where new electric transmission lines have to go in this country.

I mean, isn't that against everything the conservatives stand for? Isn't that big brother run amok? TAUZIN: Well, we have eminent domains for pipelines.

PRESS: I know.

TAUZIN: Now it's for telephone lines -- a lot of different utilities use imminent domain (UNINTELLIGIBLE). We don't have it for electric grids. The real question is, if you you're going to have intrastate transfers of electricity from states that have power, like some of the western states who have excess power to California which doesn't have it. You have to have grids to carry it over those state lines. What he's talking is the interstate connection, not the imminent domain or the decisions of state and local authorities inside the states. For the question of federal lands and boundaries where grids are bottleneck. For example, in some states that are energy negative states that need energy badly, the connections are very poor. And if you don't make the connections better, you can't supply them when they need that extra energy. That's all he's talking about.

PRESS: So here you've got an Interior Secretary Gale Norton spent her entire career in this western states land foundation. The whole thing out there is, "We don't want the federal government taking any land for parks. No land for national monuments. No land to protect endangered species." And now the Bush administration says we're going to send federal agents into the states and tell the states where they have to build electrical power lines.


TAUZIN: No, they're not sending agents into states.

PRESS: That's exactly what they're saying.

TAUZIN: No. You're missing -- you're nit picking.

PRESS: Nit picking?

TAUZIN: The truth is over 50 percent of the recommendations in this book about conservation...

PRESS: What about imminent domain.

WEXLER: Yes, let's talk about that.


TAUZIN: Fifty percent is about conservation, the rest is about supply and very a small part of it is correcting the grids. You can argue against imminent domain all you want when it comes to intrastate connections, but if you don't deal with the bottlenecks, there will be some states with a lot of power and other states that won't have not enough. And we'll continue to see some states in blackouts and brownouts.

But California can't keep relying upon other states to supply energy without grids. WEXLER: But you have to admit, Bob, and, Mr. Chairman, that when we Democrats say there's a federal role to assist local school districts to provide more assistance for schools, you guys say only the states should do it. We talk about civil rights you say only the states -- when it comes to energy and helping the oil companies, roll over the states.

NOVAK: Congressman Wexler, let me raise one point. George Bush has not been president for very long. Even the wildest Democratic partisan. Even Dick Gephardt would not say that he caused all this problem. What happened in the last eight years is interesting. And I want you to listen to one of your respected colleagues, the house majority leader and his analysis of it.


REP. RICHARD ARMEY (R-TX), MAJORITY LEADER: We just had eight years of a presidency that had no energy policy by the admission of the president's own secretary of energy who's exact quote was, "We were asleep at the wheel."


NOVAK: Bill Richardson. That's the truth, isn't it? I mean, this is something that was done by the fanning of the Clinton administration for eight years.

WEXLER: No, no. First of all, it will be irresponsible to blame President Bush for all the energy policy problems.

NOVAK: Way to go, Bob.


WEXLER: Absolutely. But it would also be irresponsible to not recognize what the Republican leadership in Congress has done during the last six years.

NOVAK: Oh, it's Billy's fault?

WEXLER: No, no, no. But he may share some part of the blame, I don't know. I mean, what about the Democratic proposal when the price of gas was only $10 a barrel, oil $10 barrel. Buy up some oil, put in the reserve. The Republicans said no. Republicans wanted, many of them, wanted to get rid of the department of energy.

NOVAK: They should have.

WEXLER: How about all the conservation programs down the tube.

NOVAK: We're out of time. Congressman Wexler, thank you very much. Congressman Tauzin. And we will conserve some time with closing comments coming up.

(COMMERCIAL BREAK) PRESS: Don't forget Congressman Tauzin in the chatroom right after the show. Bob, you know, I want to give you just a hypothetical. You know, if you just took two big oil guys and turned them loose in the White House, they could not have done a better job than this report. No, of, by and for the oil companies.

NOVAK: You're exactly wrong because if you really had two legitimate oil people, they would do what I would do, if I were president, and that's I would let the markets take care of it. I wouldn't do any of this stuff. I think that the high prices and shortages will be taken care of by investment and the markets, I think, will work itself out. I think there's too much government here.

PRESS: So you would not support the imminent domain provisions?

NOVAK: Certainly wouldn't.

PRESS: Good for you. All right, from the left, I'm Bill Press. Good night for CROSSFIRE.

NOVAK: From the right, I'm Robert Novak, join us again next time for another edition of CROSSFIRE.



4:30pm ET, 4/16

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