With President Bush singling out oil dependence as a key issue during his State of the Union address on Tuesday night, lawmakers hope to see more funding for energy programs in the administration's Fiscal Year 2007 budget. During today's OnPoint, E&E Daily senior reporters Mary O'Driscoll, Darren Samuelsohn and Ben Geman discuss lawmakers' reaction to the speech, and how it could affect the congressional agenda this year. Plus, they examine whether energy issues will play into this year's elections, and how advocacy groups responded to the president's address.
Brian Stempeck: Hello and welcome to OnPoint. I'm Brian Stempeck. Joining me today for a reporter's roundtable is Darren Samuelsohn, Mary O'Driscoll and Ben Geman, all senior reporters with E&E Daily and Greenwire. Thank you guys for being here. Darren let's start with you. President Bush laid out, of course, several new energy initiatives in his speech last night. What can we expect to see in terms of concrete action from the administration?
Darren Samuelsohn: Well, most of what we were hearing yesterday was a lot of philosophical ideas about what things are going to happen in the long-term on energy dependence. And I mean it was mostly stuff that is going to happen through the appropriations process. Bush did not call for any new energy legislation yesterday. So look for the energy and water appropriations bill, where the Department of Energy is, to see the most action on what President Bush called for yesterday.
Brian Stempeck: Now you spoke to a lot of different House and Senate leaders in the committees, in the leadership teams, how did they react to what the president had to say?
Darren Samuelsohn: Well, first off I mean Senator Frist was one of the people who said he gave us a lot of leeway in terms of what we can do with this proposal. So it's not something that I think Senator Frist was giving me any indication was going to be an energy bill on the Senate floor in 2006. Speaker Hastert, he also said energy is going to be on the agenda. He didn't really get into a heck of a lot of details about what he was going to plan on doing. So we don't know what's going on there. And then Senator Reid, from the Democratic side, he sort of attacked President Bush for calling for this cut in foreign sources of oil. But Senator Reid was saying we had a vote on this last year and the Republicans, as a party, all rejected this idea.
Brian Stempeck: Ben, you spoke to a lot of Democrats about this, what was their take? And what would they have liked to have seen in the speech?
Ben Geman: Well, it was quite mixed. On the one hand you had several Democrats saying we're glad that the president is discussing the need to reduce import dependence. At the same time there were criticisms along, I would say, sort of two basic lines. One of them is that they said without mirroring his proposals to an increase in automobile fuel efficiency standards, which the administration has opposed, then we're not going to realistically take any enormous strides toward reducing dependence on imports. And then you also had several people saying, look, again we're glad the president has been talking about weaning ourselves off imports to some extent. But they also feel like the targets that he set out were not especially ambitious. I mean for example you've got bipartisan oil savings bills in both the House and the Senate that have targets on the issue that are significantly more aggressive than the president's.
Brian Stempeck: As Darren mentioned that the key here is going to be the budget coming out in a few weeks, what we're going to see in that. You saw some of the advance budget numbers last night, what did those say to you?
Ben Geman: Yeah, that's right. The White House, as Darren points out, absent sort of, we're not seeing sweeping sort of legislative initiatives here, but rather it's more of a funding issue. And what the president is calling for is increasing Energy Department funding for things like cellulosic ethanol research, as well as increases on the electric power generation side, increases in wind and solar power technologies as well as our "clean coal" power.
Mary O'Driscoll: If I can add something here though, when you're looking at the increases that he wants to put in that, that money has got to come from somewhere. So what you really need to pay attention to is where the cuts are going to be coming from. And then I think an overall, kind of an over-arching view of this, is that there's really not going to be much in the way of policy this year. There's going to be a whole lot of rhetoric. It's an election year and it's a very close election year where the Democrats are really threatening to take control of at least one house of Congress. So you're going to see a lot of rhetoric, but I really don't think you're going to see much in the way of anything really constructive.
Brian Stempeck: I was going to say, last year during the energy bill we heard all these things talked about; ethanol, nuclear, clean coal. These are things the White House has been doing for quite some time. Is there anything new here?
Mary O'Driscoll: Not really. I mean if you give it a broad look it really isn't. I think they're pretty much tinkering around the edges. It's going to be all fought out, as everyone says, in the appropriations process. But new sweeping policy agendas, any of that kind of stuff, not really. What you're really going to see are Democrats making hay about high profits for the oil companies, high prices, where's the leadership from the administration? The administration saying we need to look at these technological improvements. We need to look at these things that are going to be long-term. So it's going to be short-term versus long-term and it's going to be fought out in the political rhetoric more than anything else.
Brian Stempeck: Now you're already hearing this week where, once again, the oil companies are under investigation by the Senate Judiciary committee. What did the committee members have to say and how is this hearing different from the hearing they had on the same subject last year?
Mary O'Driscoll: Well, this is the Judiciary Committee which has its antitrust focused on the Federal Trade Commission and their oversight of mergers and acquisitions. And Senator Specter, the chairman, was really very interesting, saying he's looking at beefing up the antitrust laws that haven't been looked at in decades. And he think this has been static and it really hasn't done anything. And it has been ignoring all the advances that corporations are being able to take advantage of. He's wondering if there's collusion. He's wondering what's going on. He noted that six major oil and gas company executives were invited and all declined to be at the hearing. He said, you know, was there collusion than that? Did they all get together and say we're not coming? So he's got a lot of questions about that and was pretty forthright about it. That this is going to continue. This is going to be something that this committee is going to take on over the course of the month. I think February 28 they'll be having another hearing at which they do expect that the CEOs will be there to discuss it. But it's really very interesting because when the commerce and the energy committees did this last fall they pretty much gave them a buy. I mean it was a very, they were talking about really going after the companies, but it was really a very mild hearing. And I don't think you're going to see that from Specter and his committee. I think Specter is really very serious about looking at this. He's very concerned about there was something like 2,600 oil industry mergers over the past 15 years. And he said on the face that's pretty amazing. And he's just very concerned about it. So it's going to be something really to watch.
Brian Stempeck: Darren, clearly this is a big political issue heading into the midterm elections in the fall. Does this suggest to you, President Bush talking about this during the election, Republicans making a big issue, that they're kind of trying to take the upper hand on energy right now?
Darren Samuelsohn: Yeah, I mean the issue of energy dependence was something that the Democrats certainly tried to make a play on in the presidential campaign. I talked to John Kerry yesterday after the speech and he was just kind of flabbergasted that Bush made these calls. And he said I called for this last year, referring to his presidential campaign. So clearly the Democrats have been trying to push this issue. And of course President Bush has also been making energy dependence an issue in, I think, the last four State of the Union addresses. So really, again, there was nothing new that we heard here. He tried to put an emphasis on the research and development side, which you know he focused more on that and he sort of seemed to be talking more long-term philosophically into the future 20 years from now, when he's not president anymore. So clearly he's trying to get people to think long term, may be beyond him and look at his legacy. I know that FutureGen was one of the proposals that was in the budget proposal and he's asking for, I think, twice as much as what he asked for last year. This is money that Congress is going to wrestle over and I don't know that they're going to really find everything that he's asked for. They have rejected his request for long-term funding for FutureGen in the past years. So it's going to be interesting as the budget battle goes on with the deficits that we have, if President Bush is really going to be able to get all these numbers into place.
Brian Stempeck: Mary, how worried do you think Republicans are about constituents talking about gas prices and voting on that when it comes to the fall?
Mary O'Driscoll: Oh I think it's a real concern, I really do. This year has really turned into a very intense political year and it's only February. So it's really going to be very interesting to watch. I think as the Spring moves on and as the summer driving season everyone talks about comes on you're going to see prices go up. They naturally go up. They're already high at this point. They're going to go up higher. The gas prices, the home heating oil prices and the home heating fuel prices have been high this winter and people are really complaining about it. Lye heat funding is a big issue that no one really pays attention to until prices just explode like they have this winter. So I think it's really worrisome for them because this is a real, when you talk about kitchen table issues, real pocketbook issues that people think about and it doesn't get much more than this.
Darren Samuelsohn: Just as a follow-up on that I think one thing that the Republicans are perhaps hoping for and shooting for with what Bush said in his speech, is that the issue of being very much aligned with big oil, so to speak, and with the oil industry. I think they're hoping that Bush's speech distances the Republicans from that idea a little bit. I was talking to Senator John Thune, a Republican senator and he made the point that, look, I think this is very important, what Bush has said, because historically or for the last several years, people have been sort of saying, again, the Republicans are sort of in cahoots with the oil industry. And he felt that this could sort of put some distance between the Republicans and that claim.
Brian Stempeck: Now what about environmental groups? What's their reaction been to this speech? I mean basically Bush is taking their message. They've been saying, groups like NRDC, the Sierra Club, have been saying for years now, we're addicted to oil and we need to be off that. He basically took their language word for word.
Darren Samuelsohn: Right. There were a few reactions. I mean one of the big reactions I've been hearing from various organizations, including some organizations that are not necessarily explicitly the big Beltway green groups, but rather some of the advocates of simply reducing oil dependency. For example, the Set America Free Coalition, which is one of these sort of left/right coalitions, and some other similar groups, have been saying, again, we welcome what the president has done. But at the same time the reduction targets are not especially aggressive. To give you an example, the president says we want to reduce dependence on Middle Eastern oil by 75 percent by 2020. Now that sounds quite impressive of course, but if you look at the numbers we're about 60 percent import dependent right now. Only about less than 20 percent of that is coming from the Middle East. So if you look at it in the aggregate what the president has proposed is not an enormous cut necessarily in overall imports. And then the second major criticism that you'll hear groups, such as the Alliance to Save Energy and others making is that, look, research into biofuels, into alternative vehicle technologies, plug-in hybrids and such, that's very important. At the same time you simply cannot achieve major reductions without addressing kind of one of the big bears out there, which is the automobile fuel efficiency standards issue. And the administration did not touch that. And you're really seeing people hammering them over that.
Mary O'Driscoll: And another issue on that front too is that the Alliance to Save Energy, those groups, are saying that the president, he felt no problem, there was no problem to go through biomass, ethanol and making this huge laundry list, nuclear, all of these different sources, clean coal. And not once did he mention demand side management. And they felt that he really missed a great educational opportunity to do something, to say something that consumers can do on their own. So they really felt that that was really an overlooked portion. But of course we'll be looking later this month to see what Bush has, he's going to be making a major speech about energy policy and kind of fleshing this out a little bit. And we'll see what he does. But at the same time they felt that he really, he had the bully pulpit, he had the nation's attention for one night and could have said that when he did his whole laundry list of everything else and he really didn't.
Brian Stempeck: All right. We're out of time. Darren, Mary, Ben, thanks for being here. I'm Brian Stempeck. This is OnPoint. Thanks for watching.
[End of Audio]