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Getting the Job Done

Energy Secretary ‘Absolutely Confident’ Conferees Will Reach Agreement

Former Michigan Sen. Spence Abraham wasn’t the obvious choice to become Energy Secretary. Before joining the Senate in 1996, he was primarily a political creature as a top aide to Vice President Dan Quayle, co-chairman of the National Republican Congressional Committee and a contender to lead the Republican National Committee.

But he was thrust into the limelight by the stunning Aug. 14 East Coast blackout and is now the administration’s point-man in the House-Senate Energy conference.

He recently sat for a Q&A with Roll Call Editor Tim Curran.

ROLL CALL EDITOR TIM CURRAN: Let’s start by talking about Aug. 14. I don’t think that was anything that anybody was anticipating, obviously, but when something like that happens, does making sure the transmission grids function properly and efficiently then become the No. 1 energy concern for this country?

ENERGY SECRETARY SPENCE ABRAHAM: As we’ve noted in our first week in office, there are a variety of serious challenges that affect the energy sector of our country. In 2001 it was California blackouts, and we returned to the issue of power outages in 2003. In the meantime we had issues that related to the sharp increases in gasoline prices. We had earlier this year the insufficient quantities of natural gas storage that are still confronting us going into the winter.

I thought it was instructive at my hearing in the House Energy and Commerce Committee the other day that even though the blackout was the topic, people were again interested in the rise in gasoline prices, showing how quickly in the energy sector problems emerge and new problem crises confront us. And that’s why we need a comprehensive energy bill. People who talk about slicing out small parts of this legislation — leaving the rest on the shelf for a later date — I think miss the point. We’ve got a variety of areas that need attention and a comprehensive bill is needed to address them.

ROLL CALL: As you’ve just referenced, severing the transmission issues has come up among the some of the House and Senate conferees.

ABRAHAM: But most of the comment was directed at not even the entire electricity package, but just one specific provision. Again, a huge mistake because we have broader problems that have to be addressed. And to delay those … for Congress to be derelict in its duty to address all of these energy problems, I think will be recognized by the American people to be a mistake.

ROLL CALL: What if it becomes clear that the conferees can’t really settle some of these larger issues?

ABRAHAM: They will settle them. I am absolutely confident that it will happen. I will not speculate about its failure. But I think they should stay — and I think they will stay — until they get the job done. I think that people forget that last Congress we came very close to finishing the job, even as we had a conference that was divided between a Democratic majority on the Senate side and a Republican majority on the House side. Yet many of these issues were conferenced, consensus was found. I believe the starting point isn’t back at the drawing board here, but well down the road toward completion. And so I’m very optimistic it will happen. … We’ve got two great leaders, [Senate Energy and Natural Resources Chairman] Pete Domenici [R-N.M.] and [House Energy and Commerce Chairman] Billy Tauzin [R-La.]. They know how to get things done. Billy did a great job last Congress almost getting to the finish line, and I think he and Pete will do that this year.

ROLL CALL: Is it the administration’s view that the decision by the Senate Republican leadership to essentially take up the bill Democrats had moved in the last Congress was a good decision in terms of getting us to a conference?

ABRAHAM: Absolutely. It was a brilliant stroke. And it allowed us to move to this stage sooner. The fact is the Senate dealt with energy for seven or so weeks on the floor last year. It had already been on and off the floor for weeks this year. There was reason to suspect that they would have never passed the bill or would have waited far too long to get it done this year. And now in light of developments after their actions, everybody should be grateful that we’ve got a bill already in the conference instead of having to try and start up from scratch again in the Senate this year or next.

ROLL CALL: Back to the transmission issue. It seems that a lot of times the issues in energy that end up on the front burner are not things we suspected would be on the front burner a month or two earlier. Is there real reason to think that the kind of problem that occurred on Aug. 14 is something that’s remediable by the federal government, or are we talking about something like operator error?

ABRAHAM: Well, look, the results of our investigation are incomplete and until they are [complete] I don’t think we can speculate about the sorts of federal remedial actions that are recommended. Regardless of what the conclusions are from our task force, however, it is clear from the grid study which our department conducted last year that we have an inadequate transmission system, an old transmission system, a system that is unprepared to deal with the huge increase in electricity demand that we foresee over the next 20 years.

And so that means we need really more investment in transmission, that means, that’s why we support repealing the [Public Utility Holding Company Act], that’s why we support investment incentives for transmissions. That’s why we believe that in the absence of that kind of investment, and at the same time improvement in efficiency for superconductivity research we’re building a smart grid. If we don’t do these things, then we’ll have other problems and they hopefully won’t be the kind of magnitude of this blackout, but there are going to be problems. One problem that we suffer from as consumers today is higher energy bills due to congestion in the transmission grid. We need to alleviate it.

ROLL CALL: And the practical effect of the administration’s initiative on RTOs and things like that are to, what do you see the short term effect of that being?

ABRAHAM: Well, like I said, there are two types of issues here. There’s the need for improvement in and upgrading of the grid at the same time. That requires a number of things. We support RTOs. We believe that they should be brought about through voluntary decision making. We believe that better coordination and a clearer framework in which regional electricity systems operate enhances the grid. It’ll mean better decision making, better planning. At the same time, we believe there needs to be more investment in the electricity sector in both transmission side and ultimately we’ll need more power generation. And you need to be able to have more people able to participate in that investment and you need to have sufficient incentive to build what we need. And if we don’t, then we’re going to strain an already overburdened system even further.

ROLL CALL: Back to what we’re going to be discussing in conference. The administration came out again and said drilling in the Arctic National Wildlife Refuge should be a priority in the conference.

ABRAHAM: Well, I think what we said is that we support it. We supported it from day one. You know, I constantly find [when] I testify on Capitol Hill, I’m generally asked about the high price of gasoline by people, some of whom strenuously oppose developing more energy sources, more oil sources here in the United States. We need to enhance our energy security. That doesn’t mean that we can eliminate the need for imported oil. It does mean that we need more flexibility so that there aren’t any disruptions in supply, as there was this year with the Venezuela oil strikes, the Nigeria civil unrest and the issues surrounding Iraq. We have more [resources] within the U.S. to draw from. That is an important priority, but it’s not the only priority we have — which I think is made clear by its placement in my letter.

ROLL CALL: Do you think it would be more symbolic or practical if exploration was allowed in the Arctic National Wildlife Refuge?

ABRAHAM: We believe the U.S. Geological Survey’s conclusions and estimates are correct: That there is a likelihood that 10 billion barrels of oil reside there. That would be one of the largest finds in the United States’ history. Just to put it in perspective, we always talk about the Strategic Petroleum Reserve and how critical it is. This would be 20 times the size of that reserve, which we view as an essential ingredient in our energy security. So we’re talking about a very substantial amount of oil. It doesn’t free us from the need to import oil, but it gives us a much stronger cushion from international supply disruptions that we worry about. That, combined with our development of hydrogen fuel-cell vehicles of the future — that we believe will in fact be the result of our program — is, in our judgment, the best route to improved energy security in the short term, and ideally energy independence in the long run.

ROLL CALL: Obviously we’re all sort of waiting for the situation in Iraq to stabilize, but down the road, assuming things go the way the administration plans that a civilian government is installed, do you expect that to change in any way the way we rely on Middle Eastern oil?

ABRAHAM: Yes, we’ve said from day one that the issues surrounding Middle Eastern oil was not the reason that we went to Iraq. It is not part of any policy discussion in which I’ve participated. The one thing that the president has made absolutely clear from day one is that an Iraqi government will decide what they’re going to do with their oil sector. Their oil is obviously a big part of the assets of the country, and the people of Iraq need to decide what they’re going to do with it and benefit themselves from those resources. It’s critical, obviously, to the long-term economic growth of the country.

ROLL CALL: Has your agency been involved in trying to help that industry get back up and running at all?

ABRAHAM: Not much. Really, I think in part it’s been very clear by our noninvolvement that that’s consistent with our position, that the Iraqi people need to decide what to do with their energy policy. I think there has been some technical experts connected to the department to provide some advice and assistance, but not a large number, and exclusively people who know some of the infrastructure problems that had to be addressed.

ROLL CALL: You touched on the hydrogen cells. The Senate Democrats have put some emphasis on the renewable fuels. How does the administration view the proposals in conference?

ABRAHAM: We strongly support investments in technology that can make more renewable sources competently priced so that we’ll find renewables as a broader share of the fuel mix. Putting a national standard in place we think is very unfair because some states enjoy certain kinds of benefits or assets with regard to access to the fuel to renewable sources rather than others. And we don’t think that these standards should be national … because this will ultimately mean shifting of income from renewable fuel-poor states to states more able to develop it. So we encourage strongly states to make this decision as the state of Texas did, but we think it ought to be done on that level that the federal standard will skew the market place that isn’t fair.

ROLL CALL: What direction is the country headed in terms of CAFE standards?

ABRAHAM: We’ve already taken an action for the first time in a number of years. We called for an increase in CAFE standards. It’s a decisionmaking process, rulemaking process, and my assumption is that will be revisited by statute, and I would assume that there would probably be additional chances. We support that and made it clear that we felt that the moratorium that had been placed should be lifted so that the Department of Transportation could in fact review the standards. We do believe that a broader range of options should be available to the National Highway Traffic Safety Administration in the future to take into account some of the kind of criteria that the National Academy of Science study has conducted on these standards and have revealed safety issues things of this sort, a little more directly into the decision making. But again that is not in our department, so I would leave it to [Transportation Secretary] Norm Mineta and [NHTSA Administrator] Jeff Runge to elaborate more on the kind of flexibility they would like.

ROLL CALL: It’s striking that today is the second anniversary of the 9/11 attacks. On Aug. 14, when you first got word of the massive blackouts that were striking the East Coast, did the idea of terrorism cross your mind?

ABRAHAM: Obviously. I mean, like most people, in the first two minutes we were questioning the causation. We were relieved when no one throughout the entire system, grid system, reported that no intentional action had taken place, no explosions, no mischief, no actions that seemed to in any way suggest a terrorist connection had occurred or existed. And nothing since. There has been no evidence of that, and that’s good news. Yet, I would acknowledge that I think like most people in the first few minutes that the first thought in my mind was what caused it and could it possibly be connected to terrorists.

ROLL CALL: So two years later do you feel that nuclear and transmission facilities are safer than they were two years ago in terms of any outside threat?

ABRAHAM: I think that between our department, the Department of Homeland Security, who has the lead responsibility here, the Nuclear Regulatory Commission, I think across the board we’ve had tremendous focus placed on security issues. Our investment in terms of complex security, which is really where our focus primarily is because of our scope, has been substantial. And, so, I believe already in most cases, the security level was extremely high and effective, and the upgrades that have been imposed since then have made it even more so. But I also made it clear in my department — and I suspect [Homeland Security Secretary] Tom Ridge and others have done the same — is that we can’t just stand pat. We can’t just simply let a new evaluation and new changes, for new reforms, let it be the end of the discussion. So I tell our people that we want on a regular basis to re-evaluate our complex security, our transportation security as we move materials and so on to guarantee that we’re never in a position where we are caught napping.

ROLL CALL: How have you adjusted to life in the Cabinet after serving in the Senate?

ABRAHAM: It’s a very different job, in the sense that as an executive department [head] or in an administrative role, it’s much broader. Obviously, a Senator has a staff of 40 or 50 people. Here we have, between our full-time department employees and contractor employees, over 110,000. It’s a much bigger executive challenge. On the other hand the pace here is very fast. There are days in the Senate — anyone who has served there, would know or would acknowledge — a lot of days when not too much is going on, you’re hoping to get your vote in or your amendment brought before the Senate and the pace isn’t very speedy. Here in this department, probably the other agencies are the same. I mean, there’s things happening every day. We took off amid a crisis in California so there really hasn’t been, at least since I’ve been here, a moment of downtime. It’s been fast-paced. The exciting thing about this department, and I think less widely recognized than it should be, is its diversity. And what has been very enjoyable to me, on any given day I might be working on national security issues with regard to our weapons lab or defense programs, or I might be working on nonproliferation issues with my Russian counterpart or others in the nuclear nonproliferation community, or I might be working on these kind of domestic energy crises, that obviously have been frequent, or I might be working on a project related to our incredible science programs, these national laboratories that develop such new things, or I might be engaged in a discussion about or working on a policy that relates to try to expedite and accelerate the cleanup of the nuclear weapons conflict. It’s a department that has all sort of components to it, and that makes it quite a challenge but also very exciting for me.

ROLL CALL: Do you think your experience in the Senate is something you will call upon as the conference moves forward? Do you expect to be rolling up your sleeves and …

ABRAHAM: The president has made it clear that I’m on the point here so I’m going to be very involved, but I also know enough about how the legislative process works. Even though I’m a former colleague there are times when it’s appropriate to engage and other times it’s important to let the Senate and the House delegation or conferees work on their own, and I’ll do my best to have a clear, sharp ear to their needs along the way to make sure that we are engaged in what we need to be.

ROLL CALL: You obviously have a full plate right now, but have you thought about the future at all?

ABRAHAM: Not really. I’m proud to serve President Bush and excited to have a chance to continue my public service here and you know, and as long as the president wants me to make my contribution this way or any other, I’m excited to have the chance.

ROLL CALL: But there will be plenty of opportunities for a Republican to run statewide in Michigan.

ABRAHAM: I won’t even comment. I’m very happy in this role. I’ve learned because of the many changes in my life that have taken place, every time — you know the one pattern that is amusing and has been noted by some is that in 1993 [now-Attorney General] John Ashcroft and I, for example, ran for [Republican National Committee] chairman. We each lost. People thought, well, they obviously, that’s the end of those guys. The next year we both were elected to Senate, 2000 we both lost our re-elections and people had a dim view of our political futures, and yet we both ended up in the Cabinet. We joke about this a lot, but just that experience and the unpredictability of the political arena makes it hard to say, you know, and right now I’m really enjoying and gaining a lot of satisfaction from the work I do here, so that’s as far as I’m looking.

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