February 9, 2001

Bush's Energy Secretary faces power shortage

By Margaret Kriz, National Journal

The Bush Administration's new Energy Secretary, Spencer Abraham, is about to learn one of Washington's dirty little secrets: Congress and the public will hold him responsible for the nation's energy woes, but the Department of Energy has very little legal authority over federal energy policy.

Consider the California energy crisis. Former Energy Secretary Bill Richardson pushed the edge of the regulatory envelope when he ordered electricity companies in the region to make power available to keep the lights on in California. Richardson's last order expired on Jan. 23, forcing the newly installed Bush Administration to extend the order for two more weeks. Outside of that emergency action, however, the DOE's hands are nearly tied. The states' public utility commissions and the Federal Energy Regulatory Commission--not the DOE--are charged with overseeing the electricity industry.

Abraham also has no authority to fulfill President Bush's controversial campaign promise to allow new oil exploration in Alaska's Arctic National Wildlife Refuge and on other federally controlled lands. Only Congress can open the Alaskan refuge to oil development. Other federal lands are under the jurisdiction of the Department of the Interior or the Agriculture Department's Forest Service. If U.S. gas prices skyrocket, Abraham will find himself traveling to the OPEC countries, pleading with the leaders of the international oil cartel to increase production.

At best, Abraham may be asked to coordinate other agencies' energy policies and seek to minimize their effect on energy production, noted Washington lawyer Linda Stuntz, who served as deputy Energy secretary during George H.W. Bush's presidency. For example, Abraham might be asked to examine the Environmental Protection Agency's recent rule cutting the amount of sulfur that can be included in diesel fuel. Some oil industry lobbyists argue that the rule will cause gasoline shortages this summer.

Abraham's greatest strengths as head of the DOE will be his knowledge of Washington's ways and his willingness to be a team player. Abraham served one term as a Republican Senator from Michigan. Before entering the Senate, Abraham was deputy chief of staff to former Vice President Dan Quayle and worked on the National Republican Congressional Committee. He was chairman of the Michigan Republican Party before coming to Washington.

While in the Senate, energy policy wasn't among Abraham's top priorities. Ironically, his most memorable energy-related action was championing legislation to eliminate the Energy Department. (During his confirmation hearings, Abraham said he has changed his mind on that issue.) He also went to bat for Michigan's auto industry, opposing proposals to force car companies to build more energy-efficient vehicles. And last summer, when gasoline prices soared in the Midwest, Abraham favored dropping the federal tax on gasoline.

Despite his limited experience in the field, Abraham "will be very active in energy policy," predicted Jack Gerard, who is on the department's transition team and is president of the National Mining Association. "But I expect there will also be a lot of involvement directly from the White House."

Along with the California energy crisis, Abraham's immediate priorities will include parceling out the millions of dollars in domestic energy research and development monies available in the DOE's budget. Clinton Administration officials in creased funding for solar, wind, and biomass energy. Bush has vowed to provide more money for fossil fuel programs, such as technologies to help coal-fired power plants produce less pollution.

Abraham must also assess the final safety reports on the disposal of commercial nuclear waste in Nevada's Yucca Mountain. He has long supported shipping to Nevada the 40,000 metric tons of radioactive materials that are now being stored at nuclear power plant sites around the country. He's also inherited an expensive program to compensate nuclear weapons plant workers sickened by Cold War-era exposure to radiation and beryllium. But Abraham's most challenging job from a budget perspective is likely to be managing the nation's weapons laboratories and cleaning up the federal nuclear weapons construction sites around the country.

Until California's electricity problems reached crisis proportions, many industry lobbyists predicted that Bush's DOE would quickly develop legislation to encourage the states to deregulate their electricity markets. After all, Bush's campaign was generously supported by Enron Chairman Ken Lay and Green Mountain Energy executive Sam Wyly, two of the most vocal cheerleaders for deregulation.

But now electricity deregulation is likely to take a backseat because of the California crisis, predicted David Nemtzow, president of the Alliance to Save Energy, a bipartisan association of energy industry and environmental groups. Nemtzow noted that Bush has been reluctant to wade into California's multibillion-dollar electricity morass. "He's a states' rights guy; he believes in deregulation. So he's thinking, `Why should the Feds get involved?' " Nemtzow said. But Stuntz, who lobbies on behalf of Southern California Edison, said the new Administration has no choice: "You can't just assume that you can continue to tolerate rolling blackouts in Silicon Valley without damaging the economy."

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-- Martin Thompson (mthom1927@aol.com), February 09, 2001