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| VICE PRESIDENT CHENEY | |
 July 18, 2001  |
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Vice President Dick Cheney examines the state of U.S. energy consumption and conservation.
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VICE PRESIDENT DICK CHENEY: Glad to have you in my office. JIM LEHRER: Thank you, sir. The polls, the editorials, even some votes in Congress, seem to indicate that you're having trouble getting your message across on energy. What's the problem? VICE PRESIDENT DICK CHENEY: Well, I think we're getting the message across. I think it's just a complicated problem. There's a reason why nobody's offered a comprehensive energy policy around here for many, many years, and it's because these are tough issues; people have strong feelings about them; they're complex issues, but I think we are getting terrific we're having a fair amount of success. We've seen positive votes now, we should have a bill out of the House before the August break. We're winning some of the key votes in committee; we did yesterday on the question of ANWR, for example, in the House Resource Committee. And we JIM LEHRER: ANWR, that's the VICE PRESIDENT DICK CHENEY: Arctic National Wildlife Reserve. And we held a series of town meetings around the country this week with myself and cabinet members, many members of Congress involved, about 30 different communities. So I think I think we're getting there. They key, though, I think people understand is there's no touchdown pass. There's no one single solution. What it is, is a whole series of solutions. I describe it as three yards in a cloud of dust when you make progress on energy. You've got to address supply; you've got to address conservation; you've got to address environmental concerns and efficiency. You've got to deal with infrastructure and pipelines and transmission lines; power plants and refineries, all of these different issues come into play in terms of making certain we've got an abundant supply of affordable energy for the country. JIM LEHRER: Did you go a little overboard in overstating the problem at the beginning and then things didn't appear to be as bad as you all said they were?
I think we've been fairly consistent in terms of how we described it. What shifts is the public opinion out there based upon the problem at the moment. We do have a tendency I think as a nation sometimes to be very shortsighted in our time horizons. The press, on the one hand, sometimes are saying, "oh, it's a terrible practice what are you going to do about it?" The next day it's an overblown deal; there's no crisis here, because gasoline has dropped a nickel a gallon since last night. And it's a lot more complicated than that. These are long-term problems. It takes years to get to develop some of these projects, and it will going forward. What you need is consistency out of government over time. We need to create an environment in which we can address these issues and take them on, not expect that there's going to be an answer and the problem will go away tomorrow. You have to deal with it year in and year out. JIM LEHRER: On the consistency issue, you said in April it's been used on you many, many times but I'm going to do it one more time… VICE PRESIDENT DICK CHENEY: All right.
Did you have a conversion or … what happened? VICE PRESIDENT DICK CHENEY: No. What happened is you've only quoted my in your first quote there the tail end of a long section on conservation I gave in a speech at the to the Associated Press in Toronto. And there are several paragraphs where I talked about conservation, how important conservation was, about our tremendous record in conservation as a nation over the last 30 years we've grown our economy 126 percent, and only increased energy demand 26 percent; we have to be much more efficient. At the very tail end of that, I said, but it's not enough. Conservation won't close the gap; we also have to produce more supply. And we've been very consistent. Go back and look at the report, at the energy report we turned out, which was drafted before I ever gave the speech in Toronto. We've got a long chapter on conservation before we ever get to talking about increased supply, so we have been consistent on it. It's just not everybody read the report, and sometimes quotes were taken out of context. JIM LEHRER: But would you not agree that those words created a perception that, whether they were taken out of context or not, that conservation was not a number one priority of you and the president and yet, now you all are saying it is?
And I also said it's not sufficient to do the job. California has got the best record in conservation in the country in terms of the amount of energy that they use per on a per capita basis, but they've got the most serious electricity problem in the country with rolling brown-outs because of a fouled-up regulatory scheme, because they didn't build any new power plants for ten years. The other thing that's frustrating when you get to dealing with these issues, everybody wants to deal with them in shorthand. But the fact of the matter is, for example, if you develop and build new gas-fired power plants, that also involves conservation. JIM LEHRER: How is that? VICE PRESIDENT DICK CHENEY: Well, the fact is a new gas-fired power plant -- a gas-fired power plant is twice as efficient as an old one. So this year, for example, Texas is going to generate more electricity and burn less gas than it did a year ago. California has got a problem because they haven't built any new plants, but 60 percent of their generating capacity is over 30 years old. But those plants use a lot more gas; they burn it inefficiently; they've got more pollutants going into the atmosphere than if they'd replaced them with new plants. So in the name of the environment they haven't built new plants and they've kept old plants operating; their keeping those old plants operating, in fact, is less efficient, involves less conservation; it involves more pollution. So it's not oftentimes a matter of choice, either we're going to conserve or we're going to have additional supply. You've got to do it all, and it's all interrelated. |
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| Fuel efficiency | |||||||||||||||||||||||||||||
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VICE PRESIDENT DICK CHENEY: I would argue that the plan has always been as it is now we didn't change it. And as we put it together, we came up with 105 recommendations that there are chapters on the environment, chapters on conservation, chapters on efficiency and on renewables, before we ever get to talking about additional supplies in the report, and that's the way it was always written. The New York Times editorialized the energy report before they ever saw it. And it was using shorthand labels like, you know, "all you guys care about it is supply," because I've been involved with the oil industry myself we were Texans, and the whole stereotype got peddled out there that somehow that's all we cared about. That's not what we cared about. We had a very balanced crew that put this altogether, all of the financial incentives in the package, recommendations for tax credits, et cetera, all go to conservation and renewables and exotics. We've spent a lot of time on that. The very first meeting we had with the task force we said, look, we've got to make sure we spend adequate time on the environment, and adequate concern for the environment in this report, or we're not going to have a credible report; we did that from the very beginning.
JIM LEHRER: There's a new report, a draft of a report from a panel at the National Academy of Sciences, about fuel efficiency for vehicles. But they don't recommend, but they say it would be possible to increase fuel efficiency eight to ten miles per gallon, particularly on pickups and SUVs, all kinds of legislation now in the House and the Senate, one of them would a 40-mile per gallon for all vehicles. What's the administration's position on this? VICE PRESIDENT DICK CHENEY: First of all, we haven't seen the report yet. There have been leaks of a portion of the draft report, and we in our recommendation to the president said we may want to change the CAFE standards for automobiles and light trucks, but we didn't know enough at that stage to make a recommendation. We wanted to see what the experts came up with the National Academy of Sciences panel. As soon as we have that, Norm Mineta, the Secretary of Transportation, has been directed to sit down and go to work on it and come up with some recommendations for this. We may end up recommending an increase in CAFE standards, but, as I say, we've not yet seen a detailed report. JIM LEHRER: The specifics aside, waiving the report and a decision, what is your own view about how much can be done in terms of conservation, in terms of reducing our dependency on fuel simply by lowering fuel efficiency standards? One report I read said over a period of ten years you could reduce it five billion gallons if you did it properly. Do you agree with that kind of stuff? VICE PRESIDENT DICK CHENEY: Well, the Commerce Committee this week wrote a provision into their bill that targets a savings of five billion gallons over a ten-year period of time, and then you can try to translate that into what does it mean with respect to how many miles per gallon we'd have to get out of a vehicle.
I mean, our track record as a nation is really very good in this area. We've done amazing things in terms of reducing the amount of energy we consume per unit of output per mile traveled over the years, and that will continue -- as the technology gets better, as we find ways to use that stuff more and more efficiently. Exactly how fast, what the right way to go is, or whether it ought to be sort of mandated federal standards or what the formula ought to be, how it ought to be constructed, those are all, I think, debatable questions. And I do think we want to continue to emphasize finding ways to use energy more efficiently. It's got to be a hallmark of our policy and a successful policy. |
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| Drilling in Alaska | |||||||||||||||||||||||||||||
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JIM LEHRER: You mentioned ANWR. There are some people in Congress, Republicans included, who say that is dead, deader than a doornail; that isn't going anywhere. Do you disagree with that? VICE PRESIDENT DICK CHENEY: I do. We had a vote yesterday in the House Resources Committee where by a margin of 29 to 19 they agreed to go forward and allow exploration in ANWR; and that included some Democrats who crossed over and voted for it. It's going to be a close fight because it's a contentious issue. But it's one of those things we ought to do, Jim. It just makes sense. We've got the technology to do it in a safe and sound manner. We can do it without despoiling the environment. JIM LEHRER: It can be done without hurting the environment?
And in the oil and gas area technology got very good at allowing us to go in and find exactly where we should drill, using directional drilling; instead of having to put a well on top of every deposit and have hundreds of wells to develop a field, you can now go in… We developed one in the Gulf of Mexico and one in Halliburton, where we developed two separate fields off one platform in the Gulf of Mexico. So you can go in with directional drilling and reach out eight or ten miles horizontally, and tap those deposits, and develop them, without disturbing very much of the surface at all. So the estimate up there is we only need to disturb 2,000 acres of surface in order to develop the resources under 19 million acres of that wilderness. JIM LEHRER: So it's worth doing? Do you think it's worth the amount of oil that you get out is worth the risk? VICE PRESIDENT DICK CHENEY: We don't know how much we'll get out. There are estimates, but a lot of exploration needs to be done to find out. But it may be the high side is on the order of fifteen or sixteen billion barrels, which is a very big field. But nobody knows. It does look like it's significant. The reason to do it is because we're now importing over half our oil from overseas. If we don't develop any domestic resources, that's going to climb to two thirds over the course of the next twenty years. Today we're importing about a million barrels a day from Iraq. Iraq isn't exactly a friend of the United States. Every time we allow that foreign dependency to increase we increase our vulnerability to vagaries of the international marketplace.
We've got some severe problems in the Middle East with Iran and Iraq, and we're still doing great. What is it that you think might happen that requires us to increase or decrease our dependence on foreign oil in a major way? VICE PRESIDENT DICK CHENEY: Well, it's a question of national security, and it's at the margins. We're never going to zero; we shouldn't try. We've made decisions that large parts of the country ought to be off limits, we don't drill off the East Coast; we don't drill off the West Coast. We don't drill off Florida. We don't develop wilderness areas, obviously. All of those are off limits. But to the extent that we can avoid climbing to where two out of every three barrels we consume in the United States has to come from the Middle East, so they've got much more of a safety margin. We also need to diversify our foreign supplies to go to non-OPEC sources. One of the great opportunities out there now is Kazakhstan in the Caspian Kazakhstan is not part of OPEC it used to be part of the Soviet Union, and it looks like they've got huge reserves. They're sort of land-locked in the middle of the Asian land mass, and to date it is very hard to get the oil out. We need to develop projects to get pipelines built out of there so that we can get access to the oil, get it into the international market, that will help stabilize prices and diversify supply. |
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| Gasoline refinement | |||||||||||||||||||||||||||||
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JIM LEHRER: Final question on energy, Mr. Vice President: It has been pointed out by several editorials recently as yesterday in USA Today, "hey, wait a minute, we're supposed to have an energy crisis", and California is going to spread all over the country and we're going to by the end of the summer gasoline was going to cost $3 a gallon in various places. What happened? Did it start producing more, more energy, more natural gas, more gasoline, people conserved? Suddenly the price of gasoline has gone down; there is no longer an energy crisis; the marketplace took care of it. Why doesn't the government just butt out? VICE PRESIDENT DICK CHENEY: Well, if we took that attitude, you know, we'd have another crisis six months from now. JIM LEHRER: You're sure we would?
In California, the solution to the problem it took them years to get into the mess they're in and they're working their way out of it, and we're doing everything we can to help. I wish them well. I think we will get there eventually. But a lot of places the problem is transmission lines. One of the problems in California is an inadequate transmission line going from Southern California to Northern California. Other places it's pipeline capacity. To meet the demand we're going to have for natural gas in this country over the next 20 years we need to build 38,000 miles of new gas main gas pipelines. That's a lot of gas pipelines. Where are you going to locate them? What's going to be the process? We're getting the siting permits to get that done in a reasonable period of time. A lot of our infrastructure is old and outmoded. People haven't invested in new refineries, for example, no new refineries in 25 years. We build a system with respect to our air quality standards that requires these fuels. Each community has a different requirement now. I talked to an operator the other day who runs a pipeline up and down the East Coast, who delivers refined product from the Gulf Coast all the way down the East Coast. When they opened in 1965, they had six grades of fuel they were moving through the pipeline; today it's over 90. And that kind of complexity makes the system increasingly fragile, and it doesn't take much then to throw it out of kilter and run into a problem. What we need are sound federal policies that take care of the environment, takes advantage of the tremendous advances in technology, creates a set of circumstances in which the private sector can go out and invest into the infrastructure, invest in the pipelines, transmission lines, refineries, generating plants to make sure we have an abundance of affordable energy. Our economy for 200 years has been built on that basis, and if we don't guarantee the future of our energy supplies, then future generations are not going to enjoy the quality of life, the living standard we all do. |
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JIM
LEHRER: Mr. Vice President, welcome.
VICE
PRESIDENT DICK CHENEY: Well, it I suppose if you think you've got a
crisis, if you turn on the wall switch and you don't get any power,
you've got a crisis. If your gasoline goes from $1.25 a gallon to $2
a gallon, the American people think they have a crisis. 
JIM
LEHRER: … "Conservation may be a sign of personal virtue but
it is not a sufficient basis for a sound, comprehensive energy policy."
Monday your wife reading your words because of your laryngitis problem
said, "Conservation is a must; we must become much more efficient
in energy used, for the country efficiency helps us make the most of
our resources, softens the impact of high prices, and reduces pollution."
VICE
PRESIDENT DICK CHENEY: No, I disagree with that, Jim. Partly, I think
I mean, look at what I said. I said it is a personal virtue. Who's going
to disagree with that? 
JIM
LEHRER: Do you agree, though, that at least if there was a perception,
that your emphasis, yours and the president's emphasis, beginning in
the spring when you came out with your plan and your speech at the AP
in April, et cetera, that your emphasis was on production, that we could
produce our way out of our short-term as well as our long-term energy
crisis, and that became kind of something you've had to deal with ever
since?
I
think partly what happened here and I will admit the perception has
been out there but part of what happened is this is one of those issues
where the people have chosen up sides over the years, and nobody listens
to anybody else. Nobody reads to see what the other guy's really saying.
Nobody sits down and looks at the report before they write an editorial
condemning it. But, you know, that's the way the world works, and we
have to live with it.
I'm
not an expert in terms of the technologies with respect to vehicles.
I spent a day up at General Motors recently at their research lab looking
at all of their new technologies; they've got some amazing things they're
able to do now with hydrogen fuel cells and electric vehicles and hydrogen
vehicles, a combination of electric and diesel, and I think we will
get additional savings. 
VICE
PRESIDENT DICK CHENEY: Oh, yes. The critics would suggest that somehow
the North slope is going to look like Kuwait after the Gulf War, you
know, with all the fires, and the smoke, and the oil if we go up there
and explore, but the technology has gotten so good, and technology is
the key here in a lot of places to increased efficiency in conservation,
finding ways that both protect the environment and produce more energy.
JIM
LEHRER: Well, what would you say to somebody who says, "yeah, that's
fine, but if you're going to pump oil, you've got to have a customer"?
The United States is the biggest customer in the world. 
VICE
PRESIDENT DICK CHENEY: Sure we would. And that's not a policy. That's
the way the last crew here worked; they just didn't address the issue.
The problem isn't just the price of gasoline, for example.