This is a partial transcript from Your World with Neil Cavuto, July 9, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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TERRY KEENAN, GUEST HOST: The cost of natural gas (search) has dipped lately, but most analysts are predicting another big pop this fall and winter. So just what’s being done to protect the economy and your bottom line?
Let’s ask the energy secretary of the United States, Spencer Abraham.
Mr. Secretary, good to have you with us.
SPENCER ABRAHAM, ENERGY SECRETARY: Thanks, Terry.
KEENAN: You know, the Fed chairman, Alan Greenspan, has been highlighting this problem. He says that natural gas prices are a threat to the economic recovery. Some CEOs calling it an emergency. How bad is the situation?
ABRAHAM: Well, we had a particularly cold winter, and that reduced the supply we have on hand, the inventories. At this time of year, compared to where we’ve been in the last five years, we’re low, and so one of the messages that I’m sounding on a tour of the country is let’s be smart about energy, let’s try to save a little bit more and be a little more energy-efficient.
KEENAN: So you went to a Home Depot today. I mean what can people do at a Home Depot to save themselves money in their actual gas bill?
ABRAHAM: Well, we used Home Depot because they’ve got a lot of energy-efficient products, a number of companies are Energy Star partners of ours, they feature products that are more energy efficient.
But we also have a Web site, www.energysavers.gov, which we invite people to log on to, which has a lot of ideas, everything from insulating your home better to buying the right kinds of light bulbs to putting programmable thermostats on your heat and air-conditioning system.
All these things are fairly affordable. They save you a lot of money in the long term and help the country along the way.
KEENAN: But are Americans really willing to conserve unless there’s a huge crisis? I mean the last 20 years, we haven’t seen much evidence of that.
ABRAHAM: Well, you know, if my man-on-the-street experience is an example, a lot of people have come up to me and have noted that their price of energy is going up with their home heating bills this past winter, this summer with air-conditioning, and so, in fact, I think people are getting the message.
The question is: Can they do something about it? And the answer is, yes, they can. They can log onto our site, the energysavers.gov site, and they can make sure when they buy new appliances that they’re Energy Star products. There are a lot of ways to do it and save money for yourself along with saving energy.
KEENAN: I think a lot of people don’t even know how natural gas prices affect them except when they start to see their bills go up so much.
KEENAN: Where are people using natural gas?
ABRAHAM: Well, you know, in increasing amounts, natural gas is what fires new electricity generation in this country. So it’s connected to your electricity...
KEENAN: So the nice air-conditioning we have in here is...
ABRAHAM: Yes, so, you know, a lot of it turns on the weather.
One of the reasons we’re facing a shortage going into this winter is we had a really cold winter last year, it brought down supplies, and so now, at this point, we’re behind where we’d like to be.
We’re hoping this summer if we have a mild summer when it’s all over that we might be able to build up some of that storage capacity.
KEENAN: Do you see the potential of a crisis kind of like the California energy crisis of a couple years ago?
ABRAHAM: No, it isn’t something that’s going to lead to blackouts, in our judgment. It could lead to considerably higher prices this winter, especially if the weather got excessively cold, and so that’s why we want to try to do a good job of conservation and energy efficiency in the meantime.
KEENAN: But is this more of a supply issue or a demand issue? There’s no shortage of natural gas in the world, is there?
ABRAHAM: Well, our challenge as a country is this: We’ve been increasing our use of natural gas, and the demand continues to go up. We haven’t built new nuclear power plants, coal has not been growing as a share of energy production, and so a lot of the focus has been and the demand increase has been on gas.
The United States has a lot of product here at home, but we’re working our way through it, and so we’re now more dependent on imports, and one of the things both that Chairman Greenspan mentioned, which we’re going to be having a summit about in a couple of months, is how can we import more, how can we bring it in in liquid form and convert it, and we think that there are ways to do that.
But we want to make sure we have a lot of sources, not just our own production but also import potential.
KEENAN: I mean Africa is a huge source of this liquefied natural gas. There was an op-ed piece in The Wall Street Journal, Robert McFarland saying we should tap into Russia’s natural gas reserves.
KEENAN: Will that help to ease the crisis?
ABRAHAM: Well, there’s a lot of great sources in the world from the Middle East to Africa to Russia to South America. The question is: How do you get it here and how do you receive it? To go over the ocean, it has to be in liquid form.
KEENAN: That adds a lot to the costs.
ABRAHAM: Right. We also then have to be able to receive it. Right now, we only have three operating liquefied natural gas receiving facilities. We need to build more, and it’s a safe way to go, and it’s one that will afford us more flexibility in the future.
KEENAN: And, hopefully, make us be able to afford our natural gas.
ABRAHAM: Well, we need it for energy security, obviously.
KEENAN: All right. Thanks for joining us today.
ABRAHAM: Thanks, Terry.
KEENAN: Appreciate it. Energy Secretary Spencer Abraham.