Here is some material from the PBS program Frontline, which is generally biased to the Left:
FRONTLINE interviewed Cheney on May 4, 2001.
F:... If I'm correct, you're the first person who is the chief executive officer of a major corporation--in this case, an energy corporation--to then have national office. What kind of perspective do you [have] in terms of what's going on now?
C:... I spent 25 years in government, then went out in private sector, and ran Halliburton for five years. ... Halliburton did not own any assets in gas or anything like that. We were hired by those who owned the assets to help them refine and produce those assets. I think it's valuable experience, especially because of the technology that's available now in the energy business. ...
F:As we go around the country, people say, "Well, of course the Republican Party has gotten tens of millions of dollars in contributions from this energy sector." You're an energy executive, or former executive. The president was in the energy business. To quote [California Governor Gray] Davis, "They're doing what the energy industry wants them to do." How do you confront that?
C:First of all, the energy industry is rarely united on anything. It's a very competitive business. A company, for example, that's heavily invested in oil will have a different perspective than one that's heavily invested in gas--a different regulatory structure, different pricing structure, different commodity. [And it] will be different from one that's heavily involved in the electric utility business. "Energy" is a nice sort of broad phrase to wrap it all around. But the fact of the matter is, if you look at the way the place actually works, it is an extraordinarily complex competitive business. Lots of times, it's hard to find any two people who agree on anything. ....
F:But you understand that people would have this idea that it's "them" who are setting the rates. It's them--people with power, the CEOs, the people who contributed to your campaigns, the people who mention your name in interviews that we do because they've gone hunting with you or fishing with you.
C:Yes, but that's the conspiracy theory of public policy. It's irresponsible. It's not true. Some politicians promote it because it's easier than dealing with substance. ... I went out and got elected with the president of the United States. We got on the ticket. The American people got to choose and they picked us, in a very close election, obviously. But now our job is to govern. I have no further financial interest. I have totally divested myself of all of my outside financial interests--at considerable cost to myself--in order to be able to come in and function in this capacity and be free of any allegations of conflicts of any kind. ...
That doesn't mean they're not controversial issues; they are. But the last administration wouldn't even touch them because they are tough issues, and we need to take them on. We think this is a very important area for us to address, and frankly, I think we'd benefit from the fact that some of us know a little bit about the business.
F:There is the perception that the last administration wanted to defend the environment, say, developing energy resources, and that your administration is willing to sacrifice the environment, if you will, for the profitability of these companies.
C:That's a false choice, and it's always presented that way by those who are opposed to doing anything. The fact of the matter is that we can do both; we must do both. We've been doing both for a long time. Even if it has significantly expanded our consumption of fossil fuels of recent years, we've also substantially reduced the amount of pollutants put into the atmosphere. A lot of the new technologies available will, on the one hand, preserve water and not despoil water, and at the same time, go develop the resources that are underneath that water. So to say you have to choose one or the other, that you're for the environment or you're for energy, is just wrong. ...
F:But should there be still a regulatory commission that can set what a just and reasonable price would be? Or do you want to phase that out?
C:My general view has been that we want to move in the direction of deregulation, and a lot of states now are moving in that direction and have done that. FERC has responsibilities. They're an independent agency. They do have authority to move in and set wholesale rates in certain areas and under certain conditions. ... They've got a job to do.
F:So there still is a role for the federal government to intervene in the market place and ...
C:I think it ought to be minimized to the maximum extent possible.
F:You know why I'm bringing it up. It's not just California; it's that electricity rates have been going up nationally. They're going up in Wyoming, your home state, maybe 50 percent this summer, as I understand. Natural gas rates, for instance in Wyoming were up 150 percent this past winter.
C:But why? ... Because we've had rapidly increasing demand for gas, and supply hasn't kept pace. Gas used to sell for a buck seventy-five or a buck eighty-five per thousand cubic feet, and now we've got $5, $6, $7. ... It's lower than that now, but it's still much higher than it's ever been on a sustained basis. Part of it is because moving forward, for example, with our expectations and future demand for electric power. Most of that capacity is expected to be fueled by gas.
At the same time, we have restricted the areas in which we look and produce gas. We don't look off the California coast, because we don't want to do any offshore activity there. We don't look off the East Coast, because we don't want to do any activity there. Florida is pretty much off-limits. About all we're developing at present offshore is in the Gulf of Mexico.
Onshore, we've put vast tracts of the U.S. off-limits as well with respect to natural gas or oil development. Some of those decisions we might agree on. I don't think it should all be open to development. But the fact is that we made it increasingly difficult to develop those resources, for all kinds of reasons. And as we've done that and increased the demand for gas, the only response that's available is to see the prices go up.
F:One of my colleagues at the New York Times wrote ... that in the 1970s, the energy crisis enemy was Saddam Hussein and OPEC. In this administration, the energy crisis is the greens.
C:The fact of the matter is that you saw in the 1970s a good example of how not to deal with the problem of prices. We had price controls imposed in 1971. They ended up controlling domestic oil production. They couldn't control imported oil. It put the price ceiling on imported oil, and other people simply wouldn't sell it to us.
But so what happened as a result of having price controls on domestic oil production, but not on imports, was that a lot of companies decided that it was clearly much more profitable to import rather than invest here at home. So we had a fairly dramatic shift in terms of reducing the amount of oil we produced here in the United States because of price controls in the 1970s, with a significant increase in our imports from overseas.
Weird things happened in the marketplace--oftentimes, unanticipated--when you do interfere. So you have to be very careful before you step in and try to solve your energy problem with price controls. It almost never works. ...
F:What do you say to people at home, elderly people, who see their heating bill go up in Wyoming 150 percent in the winter and they're on fixed incomes? Or to people who are going to see their electricity rates go through the ceiling in New York City and obviously in California and in New England and around the country? Do you say, "Grin and bear it?"
No, what I say to them is, "Look, this is a long-term problem. We didn't get here overnight. This isn't something that just happened." The fact is, for example, lots of times if we run into electricity problems as New York might this summer, it's because of an inadequate transmission grid, or because of an inadequate generating capacity. Or if we're talking about home heating oil, it's because we didn't build any new refineries in this country in over 20 years. We have to address these issues on a long-term basis if we want a real solution.
The fact is that the long-term solution to our energy problems, whether we're talking about petroleum or petroleum products or we're talking about electricity, is making sure that we have adequate supplies out there. The policies that we're interested in pursuing specifically are targeted on doing exactly that. So [we have] a lot of sympathy for the short-term problem. But if in the short term you impose a solution that doesn't increase supply or reduce demand, then we're not solving the problem. ...
C:Over the years, the lesson has been that moving in the direction of freer markets and less government regulation leads to greater efficiencies, more effective and productive enterprises to greater competition, so that the consumer benefits. We've done that in the telephone business, for example, in telecommunications ... in the airline business. So you get more product available at a lower cost for the consumer, whatever you're talking about. Clearly the effort's been made to do the same thing in the electric utility industry.
F:But it's not working.
C:But I think it is working in a lot of places.
F:Where?
C:Pennsylvania, for example, is a state that has a good track record and is generally viewed as having done a pretty good job in this area. Texas has a lot of excess capacity. ... They've been making the transition over time. So the problem you had in California was caused by a combination of things--an unwise regulatory scheme, because they didn't really deregulate. What they did was they left price caps on the retail level. They forced the utilities to sell off their generating capacity, and required them to go purchase on the spot market. At the time, spot prices were pretty low, and then they had increased demand but no increased supply. So their surplus capacity fell until the point where the prices took off. Now they're trapped from unwise regulatory schemes, plus not having addressed the supply side of the issue. They've obviously created major problems for themselves and bankrupted PG&E in the process.
For the whole interview:
pbs.org |
