Just what can the energy industry expect to encounter underincoming President-elect George W. Bush’s administration? Theformer Midland, TX, oilman, paired with former Halliburton CEO DickCheney, appears to be more open to new exploration and production.Add to that Bush’s recent Cabinet picks, and it beams a thousandpoints of light on what industry may expect in the next four years.

So far, Bush has followed the path of presidents-elect beforehim, deferring to the incumbent White House and choosing not tooffer advice about the current energy problems facing the country.But these issues, which were a large part of his year-long campaignto the presidency, are clearly on his mind.

“We are very worried about the energy problem that’s looming forthe country,” said Bush’s spokesman Ari Fleischer last week, andnoted that California was already “deeply” feeling the effects.Issues such as rising natural gas prices and continued foreignreliance on oil are things Bush’s team is “clearly worried about,”he said.

Bush, who held court over an economic conference from the TexasGovernor’s Mansion in Austin, has a transition team preparingpolicy papers on what his incoming administration wants toaccomplish. Among those papers will be a comprehensive report onenergy supply, which would then be submitted to Congress, Fleischersaid. But the American public probably won’t get a clear idea ofwhat’s planned before the next president takes office.

Still, Bush’s recent announcements for Cabinet posts and WhiteHouse advisers provide a few clues as to what his energy agendawill propose. One of his campaign themes centered on opening up aportion of the Alaska National Wildlife Refuge (ANWR) to oil andgas exploration. He also wants the United States to move away fromrelying on foreign oil imports. And then there’s the lack of a realenergy policy – something critics have said the ClintonAdministration failed to address.

Now, however, Republicans control the White House and Congress,and the battle over new exploration and production may become oneof Bush’s first battles. Clearly, things are about to become moreinteresting.

In opening remarks before the Senate Commerce Committee lastweek, Commerce Department designate Don Evans, Bush’s campaignmanager and a former energy executive himself, pledged to “foster amarketplace where ideas and energy can thrive, where theentrepreneurial spirit indeed will flourish.”

Evans, who once worked as an oilfield roughneck and also was CEOof his own energy company, won’t even be in charge of one of thedepartments overseeing aspects of the U.S. energy industry if he isconfirmed. But he offers just one more pin in the top-heavy energystructure that Bush has built around him.

Those most likely to play a key role in pushing Bush’s energyagenda through – led in no small part by Bush and Cheney – will bethe Interior and Energy Cabinet heads and to a smaller extent,Transportation. For Interior, Bush selected former ColoradoAttorney General Gale Norton. For Energy, Bush reached out toformer Michigan Sen. Spencer Abraham, who was defeated in his firstre-election bid in November. Bush also selected Norman Mineta, aDemocrat and the current secretary of the Commerce Department, tobe secretary of the Department of Transportation, which overseesthe Office of Pipeline Safety.

The real focus, the people who would be advising, shaping andimplementing Bush’s energy program within the Cabinet, is on Nortonand Abraham. Both are considered conservative Republicans whoalready have called attention to themselves in recent days becauseof their outspoken statements on issues their new departments wouldoversee.

If confirmed, handling controversy should be no problem forNorton, 46, who cut her teeth working under President RonaldReagan’s heavily criticized first Interior Secretary James Watt andWatt’s successor Donald Hodel. Norton was hired by Watt for a staffposition at the Mountain States Legal Foundation, considered theconservative’s answer to the Sierra Club, favoring Western economicinterests including mining, timber production and ranching. Shealso has litigated against the Endangered Species Act, a statutethat falls under the Interior Department’s jurisdiction.

While working under Hodel, Norton was part of an unsuccessfullobbying attempt in the mid-1980s to persuade Congress, thencontrolled by Democrats, to open part of the ANWR to exploration.As associate solicitor at Interior, Norton helped draft the legalpapers for Hodel’s plan to open the coastal plain of ANWR.

Norton, a property rights advocate, has long pushed for abalance between environmental and industrial interests in Colorado,which has a history of growth and land management issues. She hasstated that there is an opportunity to make better use of most ofthe land now under federal authority, including offering moreaccess to business.

As Colorado’s first female attorney general, Norton favoredchanging federal law in 1988 to allow industry to self-audit itsenvironmental pollution activities. Favored by business butdiscouraged by the U.S. Environmental Protection Agency, theself-audit plan, which allows companies amnesty if they findpollution problems, report them and clean them up, was threatenedwith federal sanctions.

Norton still outspokenly favored the changes. “Companies aremore likely to find out if they have environmental problems ifthere’s some hope regulators will work with them,” she said in1988.

Although Norton has not generated quite as much heat as Bush’schoice for attorney general, John Ashcroft, she already has beenstung by the Sierra Club and others, which have threatened to blockher nomination.

Jerry Taylor, director of natural resource policy for theWashington, D.C.-based Cato Institute, said that Norton’sappointment “is a throwing down of the gauntlet against theconstituency who believes that the federal government needs to lockup more land or wall off existing land from further economicexploitation.”

Calling Norton “James Watt in a skirt,” Allen Mattison, theSierra Club’s national spokesman, said she would be just asunsympathetic to conservationists as her former Interior bosses.Watt, who eventually resigned, had angered many for attempting tousurp Congressional restrictions to allow more oil and gasexploration in the West.

Alaska Sen. Frank Murkowski, who met with Norton inpre-confirmation hearings last week, brushed off theenvironmentalists’ comments, saying she would be “superb.” He saidhe foresaw no problems with her confirmation hearings, and said shewould “protect the public lands, endangered species and improveparks and recreational opportunities for all Americans.”

Edmund Spencer Abraham, “Spence” to his colleagues, is aone-term Michigan senator whom Bush has tapped to run thebeleaguered and second-tier Energy Department. Abraham, 48, wasconsidered a dark horse for the post, and ironically, he triedthree times in five years while he served in the Senate to abolishthe department he may soon head, calling it wasteful, with “no coremission.”

In a 1997 opinion article about the Energy Department writtenfor The Washington Times, Abraham said “Energy oversees everythingfrom nuclear waste disposal to energy conservation to corporatewelfare. What is not unneeded or harmful in this list would bebetter secured without Energy’s wasteful umbrella organization.”

Asked about those comments last week, Abraham was not available.His office said he was traveling. Following his selection, however,Abraham said that “as we know, many significant EnergyDepartment-related issues face us at this time, ranging from theadequacy of supply, to affordability, to the development of newtechnologies, to the issues of security at our facilities, andmore. Fortunately, this administration is comprised of manyindividuals with incredible expertise in these areas, and I lookforward to helping the president-elect to effectively address thesechallenges in the days ahead.”

Although the title of energy secretary appears to carry a lot ofweight, this actually has not been the case since the Cabinet-levelpost was formed in 1977. Its actual mission is to “foster a secureand reliable energy system that is environmentally and economicallysustainable, to be a responsible steward of the nation’s nuclearweapons, to clean up our own facilities and to support continuedU.S. leadership in science and technology.”

For instance, current Energy Secretary Bill Richardson has beencaught up in nuclear safety at facilities in New Mexico along withmany nuclear waste depository issues. However, the energysecretary’s role may evolve and take on greater importance in thenext administration.

Sen. Murkowski, who chairs the Senate Committee on Energy andNatural Resources, called Abraham’s selection “great,” and said”The Energy Department is a difficult one to manage, but I haveevery confidence that Sen. Abraham is up to the job.” Murkowski hasbeen critical of the lack of an energy policy in the Clintonadministration, and has been working on an energy package to sendto Congress in the new session.

Saying he will give Abraham his support and confidence, Sen.Murkowski said, “I look forward to working with the newadministration and with the new secretary to produce an energypolicy that maintains a balanced use of all our resources whileworking on conservation and moving to alternative fuels andrenewable energy.”

Skip Horvath, president of the Natural Gas Supply Association(NGSA), said he thought Bush’s selection of Abraham for DOE was agood pick. “I think he’s going to be good. He comes from a state[Michigan] that is an energy-producing state, so he understands theproducing issues pretty well,” he said. In addition to producers,”his state really represents all of the other interests of thenatural gas industry” — distribution, pipelines and storage.

Besides working to repeal the Energy Department when he was aSenator, Abraham has not been directly involved in energy issues,either with his work as a U.S. senator or before then. He was thefirst Michigan Republican elected to the Senate in 22 years. In hisone Senate term, he served on the Senate’s Budget Committee as wellas the Judiciary Committee, where he chaired the subcommittee onimmigration. He also served on the Commerce, Science andTransportation Committee where he chaired the subcommittee onmanufacturing and competitiveness. He also was a member of theSmall Business Committee.

Along with his Senate committee assignments, Abraham was amember of the Senate Caucus on International Narcotics Control andwas on the Commission on Security and Cooperation in Europe.

In his sparse energy-related voting record, Abraham votedagainst keeping automobile fuel efficiency standards in September1999, a vote not surprising considering he represented the largestautomobile-manufacturing state in the country. He also voted yes onmore funding for forest roads and fish habitat (September 1999);defunding renewable and solar energy (June 1999); transportationdemonstration projects (March 1998); and approving a nuclear wastedepository (April 1997).

A Michigan native, Abraham attended Michigan State Universityand then Harvard Law School, where he founded the FederalistSociety and a conservative law journal. At 30, he became aRepublican state chairman, and then in 1990, he joined formerPresident George Bush’s administration as deputy chief of staff toformer Vice President Dan Quayle.

Abraham favors many of the things his potential new boss favors:free trade, opening ANWR and doing away with many environmentalregulations. Last summer, while calling for a suspension of federalgas taxes as prices rose across the Midwest, Abraham took donationsfrom several energy companies for his November re-election bid.According to campaign finance watchdog FECInfo, Abraham had$221,848 in contributions from several energy companies, including$10,000 from El Paso Energy Corp.; $10,000 from Ohio Valley CoalCo.; and $9,000 each from Chevron, Coastal Corp. and MichiganPetroleum.

For the Sierra Club, Abraham’s appointment would further add towhat it expects will be a hostile environment for naturalresources’ issues. Sierra Club’s Daniel F. Becker, director of itsglobal warming and energy program, said Abraham had received theClub’s lowest rating on environmental issues in the last Congress.

Horvath disagreed with critics of Bush’s choice for DOE, manywhom cited the former senator’s lack of direct experience withenergy issues. “Somebody from Michigan has energy experience bydefinition because his state has all the components of the naturalgas industry” within its boundaries, he said. “So we think he’spretty well rounded.”

Whatever the criticism, it’s clear that Harvard Law School gradAbraham has taken a post in a troubled department that many othersdid not want. With its burgeoning agenda — keeping track of theU.S.’s weapons laboratories, cleaning up nuclear waste sites andmanaging the Strategic Petroleum Reserve, the next Energy chiefwill have a full plate with extra helpings on the side.

The next energy secretary faces the new challenges of dealingwith electricity shortages and energy shortfalls, as well asefforts among OPEC nations to keep the oil prices high. AndAbraham, or whoever takes the hot seat, will face the samecontroversies the Interior chief will on the prospects of openingup ANWR to oil and gas development and finding energy solutions forthe entire country amid a nearly deadlocked and potentiallyuncompromising Congress.

Carolyn Davis, Houston

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