President Bush said Monday that he was “deeply concerned” that the power crisis was “spreading beyond the California borders” and vowed to make it easier for companies to explore, exploit and transport oil and gas for the production of more electricity.
In a meeting in the Oval Office, which the president described as the first in a series to deepen his involvement in the problem, Bush named Vice President Dick Cheney to head a task force that he said would devise ways to reduce America’s “reliance upon foreign oil” and to “encourage the development of pipelines and power-generating capacity in the country.”
While Bush was not specific about his energy policy on Monday, he appeared to be using the acute electricity shortage in California to help sell a long-term national energy strategy he often discussed during the presidential campaign.
He said he intended to act “boldly and swiftly” to enact his plan, which includes an effort to pass legislation allowing drilling in the Arctic National Wildlife Refuge and granting waivers to states that seek to run older plants at full capacity, even if that means violating clean-air standards, administration officials said.
“There’s a long-term issue as well, and that is, how do we find more energy supplies, how do we encourage conservation on the one hand and bring more energy into the marketplace?” Bush said.
“And a good place to look is going to be ANWR,” he continued, using the abbreviation for the Alaskan wilderness area. He added, “I campaigned hard on the notion of having environmentally sensitive exploration at ANWR, and I think we can do so.”
Monday’s assignment puts Cheney at the center of an issue that he knows well as the former chief executive of the Halliburton Co., the oil services giant. Halliburton and its rivals would all be likely to benefit from an aggressive government push to promote exploration and to weaken environmental controls.
Elements of Bush’s plan will clearly face opposition from environmental groups and some Democrats in Congress. But just as rising predictions of government surpluses and the slowing economy gave a lift to his sweeping tax-cut initiative, the California crisis has aided Bush’s efforts to sell an energy policy that at another time would probably have faced intense opposition.
Sen. Frank Murkowski (R-Alaska), chairman of the Committee on Energy and Natural Resources, said that the California crisis had made people wake up to a looming energy crisis.
“With the previous administration we could not even get an acknowledgment that we had an energy problem in this country,” said Murkowski, whose committee will hold hearings Wednesday concerning the electricity situation. “People are now starting to realize that if you just rely on outsiders for your energy, you will pay the piper.”
Some environmentalists were critical of Bush’s approach, arguing that he was using California as an excuse to push an oil industry agenda that bore at best only an indirect relationship to the electricity shortage.
“It’s just irresponsible to lead Americans to believe that new drilling in Alaska is going to have an impact on their electricity bills,” said Adam Kolton of the Alaskan Wilderness League. “Frankly, it does not even pass the laugh test. There’s simply no link between the problems in California and the wildlife refuge.”
Bush’s chief economic adviser, Lawrence Lindsey, also described on Monday a series of short- and medium-term steps that he said the administration could “encourage and help states to take.”
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Acting on requests from California and other states hit by high prices and energy shortages, he said the Bush administration could issue pollution waivers that “would allow older plants to come on stream” in peak periods. Such plants in California pay fines when they operate, adding to the financial burden on utilities, which cannot pass the higher production costs on to consumers.
Bush has largely stuck to his pledge to make California resolve its own struggle with electricity without large-scale federal aid. He agreed last week to extend a Clinton administration emergency order that required power generators in neighboring states to use surplus generating capacity to supply California. But that policy is unpopular among the nearby states, and Bush promised that it would not be extended beyond Feb. 7.
Bush officials have not offered any other concrete proposals to help California secure electricity supplies.
They have argued that the problem stems from the state’s botched effort at deregulation and that the solution lies within the state, where Gov. Gray Davis and the Legislature are considering proposals to relieve the debt burden of utilities, to make consumers pay more for electricity and to allow the state government to arrange long-term purchases of power from independent generating companies.
Lindsey noted that higher prices “would certainly encourage conservation.” But he said that was a state decision, and Davis fears that big increases in the retail price of electricity could prove politically disastrous for him.
Monday was the 14th straight day California faced a Stage 3 alert, meaning electricity reserves were dangerously low and that blackouts were possible.
Several states in the Northwest have complained repeatedly that federal orders to sell surplus power to California had forced them to drain water tables for hydroelectric plants, endangering their own energy resources and potentially damaging the environment.
Along with Cheney, Bush’s energy task force includes Treasury Secretary Paul O’Neill, Energy Secretary Spencer Abraham, Commerce Secretary Don Evans, Agriculture Secretary Ann Veneman and Transportation Secretary Norman Mineta. It is also to include the Environmental Protection Agency administrator-designate, Christine Todd Whitman, and the interior secretary-designate, Gale Norton.