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THE CALIFORNIA ENERGY CRISIS

Energy Chief Says U.S. Is Facing Worst Shortages Since '70s

Crisis: In a glimpse at Bush's probable proposals, Abraham urges more power plants and more drilling for oil and natural gas.

March 20, 2001|RICHARD SIMON | TIMES STAFF WRITER

WASHINGTON — Energy Secretary Spencer Abraham, previewing Bush administration efforts to build political support for a national energy policy, warned Monday that the nation faces its "most serious energy shortage" since the 1970s.

"The good news is that America's energy problems can be solved," Abraham said. "The bad news is that the situation in California is not isolated. It is not temporary. And it will not fix itself."

President Bush met Monday with a task force he formed to draft an energy strategy, but said there are no "short-term fixes" to the supply shortages and price spikes.

While the task force is not expected to issue its recommendations for several weeks, Abraham offered a glimpse of the kinds of measures the administration is likely to propose and how it plans to sell the ideas to Congress.

In a speech to a U.S. Chamber of Commerce energy conference, Abraham emphasized the need to increase domestic production of oil and natural gas, including opening up the Arctic National Wildlife Refuge to drilling--perhaps Bush's most divisive energy initiative--and promoting "clean coal technology" and nuclear power. He also pledged a "balanced" policy that would promote energy conservation and the use of alternative fuels, such as wind, geothermal and solar energy.

His remarks, coming as blackouts rolled through California, were assailed by Sen. Dianne Feinstein (D-Calif.) for failing to address the state's immediate crisis.

Agreeing that power plants need to be built, Feinstein said: "The question is what the Bush administration is prepared to do in the interim to avoid blackouts this summer and wholesale electricity rates rocketing to $1,000 or more per megawatt-hour, when a year ago the cost was only $30."

Though Feinstein has accused energy companies of price gouging, Abraham called it a myth that the industry is engaged in a conspiracy to withhold supply and drive up prices.

"There is no hidden pool of energy," he said. "California and other power-strapped states will never solve the power crisis they confront until they resolve the conflict between demand and supply."

Abraham repeated his opposition to the price controls on wholesale electricity sales sought by Feinstein and a number of other Western senators.

The Federal Energy Regulatory Commission is addressing allegations of unjust prices, Abraham said, citing the agency's recent orders for wholesalers to justify $124 million in charges for electricity sold to California in January and February.

"Our goal for California . . . is to try to get through this summer with a minimal amount of disruption," he said.

Looking at the national picture, Abraham cited three issues under review by the task force:

* An increasing demand that Abraham said will require more than 1,300 new power plants over the next 20 years.

* Limited supplies, pinched by a regulatory structure that he said has "failed to keep pace with advances in technology and an uncertain political environment that discourages investment in desperately needed facilities." He noted that oil drilling technology has come a long way "since we saw Jed Clampett strike black gold and split for Beverly Hills."

* Aging transmission lines, refineries, pipelines and other energy infrastructure are "woefully antiquated and inadequate" to meet future needs.

Hal Harvey, president of the San Francisco-based Energy Foundation, criticized Abraham for displaying during his speech a newspaper ad the group took out that reads: "The Last Thing California Needs Is More Power Plants."

Pointing to the ad, Abraham said, "Some people still don't get it."

Harvey responded: "It's distressing that California's crisis is being used as a pretext for outmoded and misguided national energy policies."

He urged promotion of energy efficiency and renewable generation.

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