Watching Government An energy agenda

With Patrick Crow from Washington, D.C. [email protected] Deputy Energy Sec. Charles Curtis predicts the anticipated policy debate about global climate change mitigation measures will force a reexamination of the nation's overall energy policy.

Nov. 18, 1996

3 min read

Deputy Energy Sec. Charles Curtis predicts the anticipated policy debate about global climate change mitigation measures will force a reexamination of the nation's overall energy policy.

He told the American Petroleum Institute's annual meeting in Washington, "Without question, the most important work of the next administration will involve the development of a diplomatic and domestic strategy for addressing the global climate change challenge. The administration has indicated that it will seek approaches that are 'real and achievable' and 'flexible and cost effective.'"

Curtis said DOE needs to sharpen the focus of its climate change research and urged the oil industry to participate in that research and lobby for congressional funding.

He observed the U.S. is the major sponsor of climate change research, but programs at DOE and other agencies are under severe funding constraints.

He said, "We absolutely must take steps to make certain that our actions are predicated on the best information it is possible to bring to bear on this problem."

Curtis predicted electric utility restructuring will be a major issue in the next few years.

Marginal wells

He said the administration and Congress should do more to keep marginal wells in production, because they provide nearly 15% of the nation's oil and 5% of its gas output.

"This problem was squarely before the current administration when it entered office, and it is still there. Finding a solution is important to this nation's energy future. That the problem is hard should not deter us from continuing to press for an answer."

He said DOE will evaluate the effectiveness of producing states' programs to maintain marginal production.

Curtis said the Clinton administration will continue to oppose exploration on the Arctic National Wildlife Refuge Coastal Plain. He also predicted Congress would not expand the offshore areas currently open to exploration.

He advised against U.S. sanctions blocking investments in other nations and said the administration will continue to promote diversification of world oil supplies.

Regarding a possible drive to repeal the foreign tax credit next year, Curtis said, "I consider it unlikely that would be part of the president's budget plan or part of an agreement between the administration and the Congress."

He noted DOE and its Energy Information Administration had to explain oil market developments twice this year: gasoline prices in the spring and heating oil stocks in the fall.

"In both instances, we are reminded that when energy market disturbances occur, the public's faith in markets rather quickly erodes, and action is demanded from or by public officials."

Explaining markets

Curtis noted domestic product markets are more brittle and volatile than ever before.

"I believe it is especially important for industry and government to work together to better understand this emerging market characteristic and think through its implications. Neither investors nor consumers like surprises.

"Volatility can produce powerful political alliances. If we are to keep these markets free from ill-advised governmental intervention, we must improve our and the public's understanding of this phenomenon and, where appropriate, nurture ameliorating market-based solutions. That's something important for the next administration and this industry to work on."