NGI The Weekly Gas Market Report / NGI All News Access

Bodman Defends Energy Budget Cuts

Samuel Bodman, who has served as U.S. Energy Secretary for just over a week, had his feet held to the fire in three hours of questioning Wednesday about the administration's proposed energy budget by a not-entirely-friendly House Energy and Commerce Committee.

It was a strictly non-partisan session, with both Republicans and Democrats focusing most of their criticism on the massive cuts to research and development funding for oil and natural gas (see related story). Bodman readily acknowledged that he didn't know all of the details of every question he was asked, but he promised to bring himself up to speed as soon as he could.

"We have a lot of aspirations and goals," Bodman said of the energy budget. "We have a lot of interest in all matters that will help us do better than we are doing now. We have a fuel problem, and in part, the energy budget will continue our efforts to be successful."

The energy secretary also shared his concern about rising natural gas prices, which he said were "affecting our chemical industry...affecting a lot of industries that depend on gas for fuel."

The high oil and gas prices that the country is "dealing with today were a very long time in the making," he said. "I do not see if we passed the energy bill tomorrow and the president signed it tomorrow that it would have any short-term impact on prices."

Bodman said dealing with the high prices "requires a very balanced approach in my view. We have to look at all potential sources of energy...nuclear, coal, gas, and invest new technology in those areas. We have to make every effort also to improve the efficiency in the way we use energy today. It requires a balanced effort across the board. Not just [the Arctic National Wildlife Refuge], not just nuclear. It will take years."

Rep. Gene Green, (D-TX), said the high natural gas prices were "threatening our international competitiveness," especially in the chemical industry. "I hear you talk about support for ANWR...and a pipeline. But I also hope the department is well aware of the more recent developments in Cuba, where there is more drilling near Florida than our own government allows. This is frustrating. We are drilling in the western part of the Gulf of Mexico. But the Eastern Gulf has some of the most lucrative fields for natural gas."

Green said he also was interested in pushing through a liquefied natural gas bill to streamline the permitting process. "Anything that can be done on that front we would be interested in," said Bodman.

Rep. Barbara Cubin (R-WY) also questioned the administration's focus on ANWR. "This is not the only solution to our domestic energy problem. We have to question why there is a phase out of the oil and gas technology program. This is one area where money could be generated. We've developed technology in our state. It seems to me that this is a short sighted thing to do. I don't want to hang it on ANWR and neglect other oil deposits around the country."

Bodman answered, "I can't disagree with anything you say. All of this is a trade off... The hope is our society gets back more than we put in. The question is to make a balance." He said that these were "very tough budget times. We had to make some very tough trade offs. It affects things that are very dear to my heart...faculty, students. [The administration] looked at the choices, and I think they've done a responsible job."

The Energy Department wants to look at all fuels "in a balanced way," he said. "We've got to have more focus on nuclear, on coal..." However, Bodman had no ready answer on why the oil and gas research and development budget was slashed at a time when the country appears to want to reduce its dependence on foreign energy sources.

"Something that I think will be a very high priority on my list," he said, is the nuclear industry and in establishing Yucca Mountain as a nuclear waste depository. By moving that ahead, Bodman said he thought the nuclear industry might benefit.

"We almost have a self fulfilling prophecy," he said, in stopping any nuclear development for "over 20 years...now we are in a situation where there seems to be a greater interest in the field... We have a budget to continue that [but] there are concerns about just what the process should be. There are still choices to be made."

When questioned about the cuts to the weatherization assistance program, Bodman, a Chicago native, said, "I feel great compassion for those dealing with cold weather and not enough heat. It is certainly one of my responsibilities to work hard to find a responsible energy program in this country that can remove our dependency on foreign sources of energy, become more self sufficient and over time, lower our energy costs. I plan to work hard on it."

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.