Peña sets energy goals; proposals due later

DOE Sec. Peña
"We've tried to balance this (U.S. energy) policy to support production, but also to protect the environment and look internationally to further diversify our international sources of energy."

U.S. Energy Sec. Federico Peña has issued his comprehensive national energy strategy, a set of general policy goals that include halting the slide in U.S. oil production by 2005.

The strategy was little changed from a draft released in February (OGJ, Feb. 23, 1998, p. 34). Peña said the major difference was that DOE, responding to public comments, added a section on the effects of energy prices on low-income citizens.

The secretary said the next step in the process would be for DOE to make specific regulatory and legislative proposals to follow up on the strategy's goals.

But Peña's resignation, which he had announced 2 days earlier, cast the future of the process in doubt (see Watching Government, p. 31).

In the interim, Peña's surprise resignation will have little effect on DOE's day-to-day operation, thanks to industry confidence in Deputy Sec. Elizabeth Anne "Betsy" Moler, Washington analysts say.

Overview

Peña said, "There are compelling reasons for a new and comprehensive energy strategy at this time. First, energy plays a vital role in our economy, accounting for over 7% of our gross domestic product, or about $2,000/year for every man, woman, and child in the U.S.

"In addition, energy is big business. The global market for energy supply equipment alone in 1996 was over half a trillion dollars.

"Second, our national security depends on affordable and abundant supplies of energy. Under every conceivable scenario projected by energy analysts, natural gas and oil will remain a central part of our nation's energy future.

"As world demand for oil grows, the U.S. does not want to rely on any particular region of the world for imported oil. Moreover, our own dependence on imported oil is expected to grow from 50% today to 60% by 2010.

"Third, we recognize that the environmental effects from production and use of energy are significant. On a local level, we know that fossil fuel use is associated with regional haze and smog.

"On a global scale, many experts believe that human activities associated with energy production and use have significantly altered the composition of atmospheric gases."

Future use

Peña was asked how his energy proposals differ from previous DOE plans and if the plan would be implemented after his resignation.

He said, "This plan builds on the plans that have been completed before. The 1991 national energy strategy was primarily a very comprehensive set of legislative proposals, most of which, I think, were adopted in 1992. Then the 1995 plan called for a balancing of environmental views.

"In our plan, we have called for electric restructuring legislation-we are doing that; we have called for protection of the Strategic Petroleum Reserve (see related story, p. 30)-we are doing that; and we have called for a more vigorous involvement in technology-the President submitted a $6.5 billion, 5-year package."

Peña also said his proposals are more future-oriented.

"We've tried to balance this policy to support production, but also to protect the environment and look internationally to further diversify our international sources of energy.

"That is a new development. We're much more involved in the international marketplace, ensuring that our country is not dependent on any one particular region in the world for energy.

"We are already beginning to implement this strategy. There are a number of things we are doing. The team that is working on this with me is going to continue to implement this after I leave office in 3 months, so I'm very confident we are going to see significant progress in having this implemented."

Moler front-runner

Although President Clinton has not nominated Peña's successor, oil and gas industry leaders believe Moler will be Clinton's pick to replace Peña.

Moler, who previously chaired the Federal Energy Regulatory Commission and once was senior counsel to the U.S. Senate energy and natural resources committee, was considered a front-runner for the DOE's top job late in 1996. Political pressure for Hispanic representation at the administration's cabinet level, however, pushed Clinton to draft Peña, who was ending a term as secretary of transportation.

William White, chairman of The Wedge Group Inc. and Frontera Resources Inc., Houston, and a former deputy secretary of energy during Clinton's first term, is reluctant to name who Clinton will tap to replace Peña. But, he agrees, Moler could easily gain industry acceptance.

"She's very knowledgeable about (the) natural gas and utilities businesses," he added. "And she understands the large scope of the department's responsibilities."

White acknowledged that DOE's bureaucracy is resistant to change and poses difficult management issues for anyone serving in that cabinet post. "It's difficult to effect change (in the department)," he said. "But her strengths are her industry savvy, her experience on the Hill, and her consensus building skills."

White, who had come under attack for his proposal to sell the Elk Hills naval petroleum reserve, hopes Moler will look closely at splitting DOE into two cabinet-level posts-separating nuclear energy and nuclear waste disposal from national energy policy and management of the country's national research laboratories.

"We need a (second) cabinet post that has a national energy policy focus while also strengthening our science and technology research labs," he added.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.