President George W. Bush energy policy & hurricane Katrina

Preface. After Hurricane Katrina damaged oil and gas infrastructure, oil prices shot up. Below are excerpts from news stories in 2005 when President Bush, an oilman, openly discussed the U.S. energy dependence.

A few quotes :

The “hydrocarbon society” is coming to an end, and the U.S. will have no choice but to diversify its sources of energy.
“It took us awhile to get to where we are today and it’s going to take us awhile to become less dependent on foreign sources of energy. The one thing that is clear is that Saudi Arabia is not in the same position it was a few years ago when it had “millions of barrels” of excess capacity sitting idle”
We now import more than half our oil from abroad. Think about that: more than half of the oil that we consume in order to maintain our lifestyles comes from overseas, or abroad. I believe that creates a national security issue and an economic security issue for the United States.

For the full impact of the hurricane on oil and gas (and more) that drove Bush to be more honest than usual, see House 109-32 (2005-9-7) Hurricane Katrina’s effect on Gasoline supply and prices. U.S. House of Representatives.

Of course, one solution Bush offered was drill baby drill, but also conservation and weatherization. But not wind, solar, or other renewables, which adds to my suspicion that many people in power know renewables can’t replace fossils, and therefore must have emergency plans tucked away in top secret corners of Homeland Security to deal with shortages & getting food to cities, preventing mass migrations, and more.

Thanks to fracked shale oil and natural gas, congress declared the U.S. energy independent, and peak oil has been out of sight, out of mind in the media since 2006, but with 7 of the 8 fracked oil basins in decline, Russia invading Ukraine, and world peak oil production likely in 2018, I expect energy to be front and center again from now on.

Alex Keto. 2005. WHITE HOUSE WATCH: Ending The Hydrocarbon Society. A Dow Jones Newswires Analysis.

Amid high prices and surging demand for crude oil and gasoline, President George W. Bush said the era of the “hydrocarbon society” is coming to an end, and the U.S. will have no choice but to diversify its sources of energy.

“The hydrocarbon society will still be with us, but it can’t be with us to the extent it is today,” Bush said in an interview with CNBC’s Ron Insana that was taped Monday and broadcast on Tuesday.

“Listen, we’re all going to have to diversify away from hydrocarbons over time,” he said.

As an example of this, Bush cited his own efforts to fund research into hydrogen powered cars and said the U.S. needs to build new nuclear power plants.

For those looking for a quick fix to the problem of high energy prices, the president had bad news, saying that even if Congress passes his package of energy bills, it won’t bring immediate relief.

“Even signing an energy bill, you don’t have an instant fix,” Bush said. “It took us awhile to get to where we are today and it’s going to take us awhile to become less dependent on foreign sources of energy.”

The one thing that is clear is that Saudi Arabia is not in the same position it was a few years ago when it had “millions of barrels” of excess capacity sitting idle, Bush said.

As he has in the recent weeks, Bush cited rapidly increasing demand for crude oil from China and India, but said he saw no evidence China, for instance, is trying to push the U.S. out of any energy markets.

“I don’t think there’s an…economic war plan that would crowd the U.S. out of the energy market. I do think they’re (China) trying to, you know, satisfy a huge appetite for a massive economy growth, a fast-growing economy,” Bush said.

“I was pleased to see that, that (the Chinese are willing to build nuclear power plants. And I would hope India would do the same thing,” Bush said. “Because as they demand energy, it would be very helpful that a part of that demand is not in the hydrocarbon sector.”

Another area the president wants to take a close look at is the regulations surrounding the construction of refineries. It has been literally decades since a new refinery was built in the U.S.

Bush said one way to push gasoline prices lower is to make sure there is a greater supply of the commodity.

Another factor in the energy equation is the falling dollar. Given that crude is priced in dollars, a weaker dollar tends to force producers to push the price of oil higher in order to recoup costs incurred in other currencies.

Bush scoffed at the notion that he has no objection to high energy prices because of his own background in the oil sector and because it helps boost the bottom line of oil companies. Instead, he said it was clear gasoline prices were hurting some Americans and it was weighing on the stock market.

“People are constantly adjusting, and I suspect some (of the decline in) the stock market has to do with the price of gasoline. You know, when the price of crude oil tends to go up and the stock market tends to go down,” Bush said.

He also said the government and the federal reserve are watching for signs of inflation stemming from higher oil prices but the best solution to any inflationary pressures are tax cuts. This puts more disposable income in the pockets of Americans, Bush said.

Mar 9, 2005 Remarks by the President on Energy Policy

http://releases.usnewswire.com/GetRelease.asp?id=44120

Contact: White House Press Office, 202-456-2580

WASHINGTON, /U.S. Newswire/ Franklin County Veterans Memorial Columbus, Ohio

THE PRESIDENT: I’m here to talk about: the importance of a sound national energy policy.

Everybody who drives a car or runs a farm understands the importance of energy. Every small business, which dreams about expanding his or her job base, worries about energy. Families worry about energy. And higher prices at the gas pump and rising home heating bills and the possibility of blackout are legitimate concerns for all Americans. And all these uncertainties about energy supply are a drag on our economy. It is difficult for entrepreneurs to risk capital when they cannot predict the size of next month’s energy bill. If small businesses have the choice between adding a new worker or keeping the machines running, they’re not going to do much hiring.

As you learned here in Ohio in the summer of 2003, it’s hard to plan with confidence if you’re not sure the lights are going to stay on. During my second week as President, as Sam pointed out, I put together a task force to address America’s energy challenges. Energy consumption was growing, costs were rising, we had an unreliable power grid, and we were dependent on foreign energy. This task force sent back a hundred recommendations to improve energy policy, and we put some of them into effect:

1) we streamlined the permit process to encourage exploration for oil and gas

2) we filled the Strategic Petroleum Reserve to improve our security during a time of war

3) we promoted new forms of energy conservation at government facilities

4) we increased weatherization assistance by nearly 50 percent to help more low-income families insulate their homes and save on their heating bills.

This country must do more, and it requires legislative approval by the United States Congress. To meet America’s energy needs in the 21st century, we need a comprehensive national energy policy. It’s time for Congress to act.

Ideas or examples [ I’ve extracted just a few of them below ]

I’ve proposed tax credits for drivers who choose fuel-efficient hybrid vehicles.
We’re helping to develop lighter automobile parts that will save weight without sacrificing safety.
We got flat panel computer screens that can operate around the clock and consume very little power.
There’s traffic signals that give off more light while taking in less electricity.
You can store your food in super-efficient refrigerators that use less energy than a 75-watt light bulb.
Devices called smart meters show how much energy you’re using and then calculate exactly what that energy is going to cost you.
Look for the Energy Star label

A sound energy bill must meet four objectives:

It must promote conservation and efficiency
Increase domestic production
Diversify our energy supply
Modernize our energy infrastructure

The first objective of a sound energy bill is to encourage the use of technology to improve energy conservation. We’re constantly searching for smarter ways to meet our energy needs. We’re constantly looking for new technologies to help Americans conserve. I mean, it makes sense, doesn’t it? If you want to become less dependent on foreign sources of energy, we’ve got to be better conservers of energy. The more we conserve, the less we use; and the less we use, the less dependent we are on foreign sources of energy.

Secondly, we need to encourage more energy production at home. If you want to become less dependent on foreign sources of energy, you need to find more energy here. The need is clear. Over the past three years, America’s energy consumption has increased by more than 3 percent, yet our domestic energy production has decreased by 2 percent. That means relying more on energy from foreign countries.

We now import more than half our oil from abroad. Think about that: more than half of the oil that we consume in order to maintain our lifestyles comes from overseas, or abroad. And our dependence is growing. We’re becoming more reliant upon natural gas, and a lot of it is coming from outside our borders. I believe that creates a national security issue and an economic security issue for the United States. And that’s why it’s important for us to utilize the resources we have here at home in environmentally friendly ways.

Increasing our energy security begins with a firm commitment to America’s most abundant energy sources — source, and that is coal.

Our nation is blessed with enough coal to last another 250 years. We’ve got a lot of it. In Ohio, when you use electricity there’s a 90% chance that that electricity is coming from coal. Coal is at the heart of Ohio’s energy strategy, and it should be at the heart of America’s energy strategy.

Coal presents an environmental challenge. Most of Ohio’s coal is high in sulfur. And that makes it harder for your good state to meet strict air quality standards. That’s why clean coal technology is critical to the future of this country. It’s critical to the future of the state. It’s critical for the job creators of your state. It’s critical for the working people of your state. It’s critical for this country. When I ran for President in 2000, I pledged to invest $2 billion over 10 years to promote research into clean coal technologies. I kept my promise. My budget for 2006 brings clean coal funding to $1.6 billion over five years, and that puts us on pace to exceed my pledge by more than 50 percent.

And we’re doing some interesting things. We’re funding research into innovative projects, such as the process for converting coal into clean-burning gas. We’re taking coal, there’s a process that converts it into gas that burns cleanly. A company in Cincinnati is cooperating with a coal plant in New Mexico to eliminate almost all sulfur emissions and turn the byproduct into a usable fertilizer.

We’re developing technology so that we can build the world’s first coal-fueled zero emission power plant. I believe it’s possible.

OIL

To produce more energy at home, we need to open up new areas to environmentally responsible exploration for oil and natural gas, including the Arctic National Wildlife Refuge — that’s called ANWR. (Applause.) The Department of Interior estimates that we could recover more than 10 billion barrels of oil from a small corner of ANWR that was reserved specifically for energy development. That’s the same amount of new oil we could get from 41 states combined. We can now reach all of ANWR’s oil by drilling on just 2,000 acres. Two thousand acres is the size of the Columbus airport. By applying the most innovative environmental practices, we can carry out the project with almost no impact on land or local wildlife. And that’s important for you all to know.

You see, developing a small section of ANWR would not only create thousands of new jobs, but it would eventually reduce our dependence on foreign oil by up to a million barrels of oil a day. Congress needs to look at the science and look at the facts and send me a bill that includes exploration in ANWR for the sake of our country.

ALTERNATIVE ENERGY

The third objective of a sound energy bill is to diversify our energy supply by developing alternative sources of energy.

Congress should provide tax credits for renewable power sources such as wind and solar and landfill gas.
Congress needs to continue strong support for ethanol and biodiesel.
To ensure a diverse energy supply, we need to promote safe, clean nuclear power.
Another vital energy project is the hydrogen fuel initiative. When hydrogen is used in a fuel cell, it has the potential to power anything from a computer, to a cell phone, to an automobile that emits pure water instead of exhaust fumes. At Battelle, engineers have found a way to use hydrogen fuel cells to power the electronics on a Bradley Fighting Vehicle. We’re providing $1.2 billion over five years to help move hydrogen-powered cars from the research lab to the dealership lot.

INFRASTRUCTURE

The final objective of a sound energy bill is to find better, more reliable ways to deliver energy to consumers. Some parts of the country, homes and businesses are receiving 21st century power through infrastructure that was made decades ago. Transmission lines and pipe lines and generating facilities are deteriorating. Different regions share electricity over unreliable transmission lines. These strains on the system lead to higher prices and they lead to bottlenecks in delivery. And just one piece of the power grid — if one piece fails, you in Ohio know the results: darkness across the map.

Congress can solve these problems in a few simple ways. Current law makes it optional, rather than mandatory, for power companies to ensure reliability across the electricity grid. Most of you consider it mandatory for the light to come on when you flip the switch. (Laughter.) Congress too needs to make sure that reliability on the electricity grid is mandatory, not voluntary, when it comes to our power companies. (Applause.)

We need to repeal the outdated rules that discourage investment in new power infrastructure. Incredibly enough, there’s a law on the books from the Depression that prohibits new investment when it comes to expanding the transmission of electricity. That needs to be repealed. I mean, we’re living in the 21st century. We’ve got a lot of work to do to make sure that we have reliable sources of electricity coming into our homes and to our businesses.

We need to make sure local disputes don’t cause national problems when it comes to developing an infrastructure. Federal officials should have the authority to site new power lines. Listen, we’ve got modern interstate grids for phone; we’ve got a modern connection with our highways; America needs a modern electricity grid, too, in order to make sure that we can compete in a global economy, in order to make sure people can find work.

Apr 20, 2005 Bush’s interview with Insana arretium

Insana: You’ve expressed your concern about rising oil prices. There are some people who worry that even as we wait for your energy bill to be passed we could see a $3 or $4 price-per-gallon for gasoline this summer. Before the bill passes, is there anything you can do to bring down the price so that it’s not going to be a burden to the average American come this summer?

President Bush: A couple of points on that. First, you know, it took us awhile to get to where we are today and it’s going to take us awhile to become less dependent on foreign sources of energy. Even signing an energy bill, you don’t have an instant fix. Secondly, I fully understand high gas prices is beginning to really pinch a lot of our fellow citizens, and that’s troubling. There are some things that we need to do in the energy bill, which is encourage more exploration, we need to look refining capacity — how do we help put regulations in place that will encourage construction of refineries so, at the very minimum, there’s a steady source of supply of gasoline. Thirdly, obviously, internationally I’ll be talking to our friends about making sure that they understand that if they pinch the world economy too much, it’ll affect their ability to sell crude oil in the long run.

[The high] price of gasoline should be a wake-up call to the United States Congress to get an energy bill passed that encourages conservation, encourages exploration for hydrocarbons in environmentally friendly ways, causes us to open up more portals for liquefied natural gas to come from around the world. I mean, there’s a lot of things we need to do. I am for safe nuclear energy expansion. I’m for clean coal technologies. I know ultimately the automobile manufacturers, if the marketplace so demands, are going to have to come up with a different mixture of fuels and automobiles.

Insana: Well, GM and Ford are getting hit pretty hard right now based on how gasoline prices are. Are you worried about what the impact of a weakened General Motors might be on the economy because oil prices and gasoline prices are so high?

President Bush: I think they’re going to have to learn to compete. In other words, if the consumer starts saying we want a different kind of automobile, they’re going to compete once again with, say, the Japanese automobile manufacturers to, to, to, to get a, to keep their lion’s share of market demand.

Insana: Can you try to relax the restrictions on reformulated gasoline? Could you release oil from the strategic petroleum reserve, or take some short-term measures should we see some sort of gasoline shock this summer?

President Bush: Well, you know, I, I — first of all, the SPRO was put in place for a national emergency. And that’s what it’s going to be used for. In terms of — we’re going to look at all regulations in terms of the manufacture of gasoline, refining of gasoline. Whether or not, you know, regulations that could prevent a refiner from expanding. The more supply there is of a, of, of a commodity, the, the, you know, it’s going to take pressure off of price. And we’ve got to look at ways to not only mitigate the regulatory causes of price, but also the regulations that will prevent, or discourage people from investing capital to create expansion of refineries.

Insana: Some of your loyal opponents on Capitol Hill today made some cynical comments suggesting that you don’t mind way high oil prices because they help some of your friends in the oil business. How would you respond to statements like that?

President Bush: I, I’m the president of everybody. And I — look, I go to Fort Hood, Texas, and I sit down at a table with a young solider and we’re talking about his tour of duty. And one of the first questions he asked me is what are you going to do about gasoline prices, Mr. President?

I mean, here’s a kid who has, you know, put his life on the line for our nation’s freedom and for peace and he’s worried about gasoline prices. ‘Course I’m worried about gasoline prices. And a high price of crude drives the price of gasoline.

And listen, I’ve been talking to Congress for three or four years now about getting a plan in place, getting a bill to my desk that reflects a comprehensive energy plan. And in all due respect to the members of Congress who are — might be somewhat critical of the administration, it’s time for them to stop debating and time for them to get a bill to my desk.

Insana: The government, whether it’s, you know, your administration or even the Federal Reserve, that inflation’s not a problem right now. And that’s true unless you are filling up your car, buying a house, now picking up a cup of coffee at Starbucks, sending your kid to school, or paying your doctor bills. Is inflation a problem for the average American that’s going unrecognized by the federal government?

President Bush: No, I don’t think so. Yes, I think inflation can be a problem for the average American, and no, I don’t think it’s going unrecognized. As a matter of fact, why I was so strongly for tax relief, you know, I, I, I want there to be more money in the pockets of the average American family. And, you know, some are talking about running taxes back up. I think it would be a huge mistake. I think it would hurt the economy, but more importantly it would hurt the average American family.

Insana: — African nations. Do you think the Chinese are trying to crowd the U.S. out of the energy markets? Because five, 10 years from now, their needs are going to be even bigger than our own.

President Bush: I don’t think there’s an economic war plan that would crowd the U.S. out of the energy market. I do think they’re trying to satisfy a huge appetite for a massive economy growth, a fast-growing economy. And I was pleased to see that they’re willing to build nuclear power plants. And I would hope India would do the same thing, these fast-growing under-developed economies. Because as they demand energy, it would be very helpful that a part of that demand is not in the hydrocarbon sector.

Alex Keto. 2005. WHITE HOUSE WATCH: Ending The Hydrocarbon Society. A Dow Jones Newswires Analysis.

Mar 9, 2005 Remarks by the President on Energy Policy

Increasing our energy security begins with a firm commitment to America’s most abundant energy sources — source, and that is coal.

OIL

Listen, we’re all going to have to diversify away from hydrocarbons over time. We’re just going to have to change our habits.

The hydrocarbon society will still be with us, but it can’t be with us to the extent it is today.

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