Vice President Dick Cheney on Energy Supply
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VICE PRESIDENT DICK CHENEY: Thank you very much. It’s good to be here.
We meet at the hundred-day mark of a new administration, one I’ve been very proud to be part of. The Oval Office is the final point of decision in our government, and the president has shown himself to be the kind of person you want sitting there. He’s a man of conviction and discipline, who in a very short time has managed to change the tone of the discourse in Washington. He knows how to put a strong executive team in place, and has done so. And he has not hesitated to take on issues that haven’t been seriously addressed in years.
One of those issues will be my topic this afternoon, and when I finish I’ll be happy to take your questions.
During our campaign, then-Governor Bush and I spoke of energy as a storm cloud forming over the economy. America’s reliance on energy, and fossil fuels in particular, has lately taken on an urgency not felt since the late 1970s. A few years ago, many people had never heard the term “rolling blackout.” Now everybody in California knows the term all too well. And the rest of America is starting to wonder when these rolling blackouts might roll over them.
It’s only reasonable for Americans to ask if California is once again foretelling a national trend. Throughout the country, we’ve seen sharp increases in fuel prices, from home heating oil to gasoline — which has again soared over the past several weeks, hitting two dollars a gallon in downtown Chicago. In parts of the Northeast, communities face the possibility of electricity shortages this summer. Energy costs as a share of household expenses have been rising, and families are really feeling the pinch.
So, too, are farms and factories, which ordinarily would pass the cost along to consumers. Instead, some are simply curtailing production and laying off workers. Such costs are hard to measure in an economy as great as ours, but they do add up. By one estimate, rising fuel prices cost the economy at least a hundred billion dollars in 1999 alone.
The crisis we face is largely the result of short-sighted domestic policies — or, as in recent years, no policy at all.
As a country, we have demanded more and more energy. But we have not brought online the supplies needed to meet that demand. That is the problem in California, where demand has grown five times faster than supply over the last five years. And without a clear, coherent energy strategy for the nation, all Americans could one day go through what Californians are experiencing now, or worse. Such a strategy requires a hard look at the country’s needs — and what is required, in supplies and infrastructure, to meet demand.
The situation has been years in the making. It will take years to overcome. But President Bush and I have begun that work.
In January, he directed me to form a task force to recommend a new national energy strategy. We will present our report in a few weeks’ time. You can expect a mix of new legislation, executive action, and private initiatives. There will be many recommendations — some obvious, some more complicated. But they will all arise from three basic principles.
First, our strategy will be comprehensive in approach, and long-term in outlook. By comprehensive, I mean just that — a realistic assessment of where we are, where we need to go, and what it will take. By long-term, I mean none of the usual quick fixes, which in the field of energy never fix anything. Price controls, tapping strategic reserves, creating new federal agencies — if these were any solution, we’d have resolved the problems a long time ago.
Some things about the future, we cannot know. Years down the road, alternative fuels may become a great deal more plentiful. But we are not yet in any position to stake our economy and our own way of life on that possibility. For now, we must take the facts as they are. Whatever our hopes for developing alternative sources and for conserving energy, the reality is that fossil fuels supply virtually a hundred percent of our transportation needs, and an overwhelming share of our electricity requirements. For years down the road, this will continue to be true.
We know that in the next two decades, our country’s demand for oil will grow by a third. Yet we are producing less oil today — 39 percent less — than we were in 1970. We make up the difference with imports, relying ever more on the good graces of foreign suppliers. How dependent have we become? Think of this: During the Arab oil embargo of the ’70s, 36 percent of our oil came from abroad. Today it’s 56 percent, growing steadily, and under the current trend is set to reach 64 percent less than two decades from now.
Here’s what we know about natural gas. By 2020, our demand will rise by two-thirds. This is a plentiful, clean-burning fuel, and we’re producing and using more of it than ever. What we have not done is build all of the needed infrastructure to carry it from the source to the user.
Then there is the energy we take most for granted, electricity. We all speak of the new economy and its marvels, sometimes forgetting that it all runs on electricity. And overall demand for electric power is expected to rise by 43 percent over the next 20 years.
So this is where we are with the demand for oil and gas and electricity. The options left to us are limited and they are clear.
For the oil we need, unless we choose to accept our growing dependence on foreign suppliers — and all that goes with that — we must increase domestic production from known sources. We must also increase our refining capacity to prevent the kind of bottlenecks that cause gasoline prices to spike in different parts of the country. As matters stand, it’s been about 20 years since a large refinery was built in the United States.
For the natural gas we need, we must lay more pipelines — at least 38,000 miles more — as well as many thousands of miles of added distribution lines to bring natural gas into our homes and workplaces.
For the electricity we need, we must be ambitious. Transmission grids stand in need of repair, upgrading, and expansion. Demand for electricity is vast, but it also varies from place to place and from season to season. An expanded grid system would allow us to meet demand as it arises, sending power to where it’s needed from where it’s not. If we put these connections in place, we’ll go a long way toward avoiding future blackouts.
That will only work, of course, if we’re generating enough power in the first place. Over the next 20 years, just meeting projected demand will require between 1300 and 1900 new power plants. That averages out to more than one new plant per week, every week, for 20 years running.
It’s time to get moving — and here again, we must take the facts as they are. Coal is still the most plentiful source of affordable energy in this country, and it is by far the primary source of electric power generation. This will be the case for years to come. To try and tell ourselves otherwise is to deny blunt reality.
Coal is not the cleanest source of energy, and we must support efforts to improve clean-coal technology to soften its impact on the environment. That leads me to the second principle of our energy strategy: Good stewardship.
We will insist on protecting and enhancing the environment, showing consideration for the air and natural lands and watersheds of our country.
This will require overcoming what is for some a cherished myth — that energy production and the environment must always involve competing values. We can explore for energy, we can produce energy and use it, and we can do so with a decent regard for the natural environment.
Alaska is the best case in point. As President Ronald Reagan once said, “No one wants to treat this last American frontier as we treated the first.” President Bush and I see it the same way, and so do the American people. If we had to make do with the drilling technology of the past, then there would be a strong case against exploration in the Alaskan wild.
But oil drilling has changed enormously, especially in very recent years. Three-dimensional seismic readings now have pinpoint accuracy, greatly improving the success rate and minimizing the occurrence of dry holes. In Prudhoe Bay, the vast majority of drilling over the past decade has been horizontal, allowing much oil production to go literally unnoticed, and habitat undisturbed.
The same sensitivity, and the same methods, would be applied in the event we opened production in the Arctic National Wildlife Reserve. ANWR covers 19 million acres, roughly the size of South Carolina. The amount of land affected by oil production would be 2000 acres, less than one-fifth the size of Dulles Airport. The notion that somehow developing the resources in ANWR requires a vast despoiling of the environment is provably false. This is one reason why the overwhelming majority of people who live in Alaska support developing this resource in their home state.
President Bush and I are Westerners. I grew up in Wyoming, where my dad worked in soil conservation. It’s a region where stewardship is a serious matter. People rely on the land — not only for the livelihood it yields, but for the life it offers. You come to appreciate the wonders of creation all around you. The quickest way to lose respect in my part of the country is to act harshly or selfishly toward the natural world and its inhabitants. There is no excuse for that kind of reckless disregard of nature’s claims. Our energy strategy will leave no room for it.
We can also safeguard the environment by making greater use of the cleanest methods of power generation we know. We have, after all, mastered one form of technology that causes zero emissions of greenhouse gases, and that is nuclear power. Fortunately for the environment, one-fifth of our electricity is nuclear-generated. But the government has not granted a single new nuclear power permit in more than 20 years, and many existing plants are expected to shut down. If we’re serious about environmental protection, then we must seriously question the wisdom of backing away from what is, as a matter of record, a safe, clean, and very plentiful energy source.
The same can be said of hydroelectric power. Nine percent of electricity generated in America comes from dams. We must be mindful of the fish and wildlife affected by man-made dams, and we can do that without placing unnecessary burdens on a very viable and safe source of energy.
Another part of our energy future is power from renewable sources, some known, others perhaps still to be discovered. There’s been progress in the use of biomass, geothermal, wind, and solar energy. Twenty years from now, with continued advances in R&D, we can reasonably expect renewables to meet three times the share of energy needs they meet today — from two percent of the national total, to six percent.
The third and final principle of our energy strategy is to make better use, through the latest technology, of what we take from the earth. I’ve already mentioned clean-coal technology and alternative clean energy sources. But it’s more than a matter of cleaner use, it’s efficient use as well.
Here we aim to continue a path of uninterrupted progress in many fields. We have millions of fuel-efficient cars, where silicon chips effectively tune the engine between every firing of a spark plug. The latest computer screens use a fraction of the power needed in older models. Low-power technology has been perfected for many portable and wireless devices. Everything from light bulbs to appliances to video equipment is far more energy-efficient than ever before. New technologies are proving that we can save energy without sacrificing our standard of living. And we’re going to encourage it in every way possible.
In doing all these things, however, we must be clear about our purposes. The aim here is efficiency, not austerity. We all remember the energy crisis of the 1970s, when people in positions of responsibility complained that Americans just used too much energy.
Well, it’s a good thing to conserve energy in our daily lives, and probably all of us can think of ways to do so. We can certainly think of ways that other people can conserve energy. And therein lies a temptation for policymakers — the impulse to begin telling Americans that we live too well, and — to recall a 70s phrase — that we’ve got to “do more with less.” Already some groups are suggesting that government step in to force Americans to consume less energy, as if we could simply conserve or ration our way out of the situation we’re in.
To speak exclusively of conservation is to duck the tough issues. Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy. People work very hard to get where they are. And the hardest working are the least likely to go around squandering energy, or anything else that costs them money. Our strategy will recognize that the present crisis does not represent a failing of the American people.
America’s energy challenges are serious, but they are not perplexing. We know what needs to be done. We’ve always had the ability. We still have the resources. And, as of one hundred days ago, we once again have the leadership.
Thank you very much.