A day before environmental activists launch a vigorous ad campaign to vilify the president's energy plan, Energy Secretary Spencer Abraham toasted members of the influential Competitive Enterprise Institute (CEI) think tank that has shaped much of the debate over energy policy in Washington.

Abraham was among 400 like-minded compatriots -- including Sen. Fred Thompson, R-Tenn., and former Housing Secretary and vice presidential candidate Jack Kemp -- at CEI's annual dinner.

A think tank advocating free market principles, CEI is reviled by environmental activists and wields considerable influence in the debate at the intersection of energy and environmental issues.

Abraham enjoyed a warm reception, even among those who don't subscribe to the entire Bush energy policy. Last week, when the Bush plan was released, CEI said that "not every aspect of the plan is compatible with free-market ideas. The proposal to increase subsidies for inefficient fuels and research designed to benefit particular industries are both the least effective and the most costly aspects of the plan."

The proposed energy policy, in a nod to the concerns of those fearful of environmental damage, sets aside $2 billion in tax incentives for alternative fuels research, $4 billion in tax breaks to consumers who purchase hybrid cars and $2 billion for investigating clean coal technology.

The slight, however, was overlooked by Abraham, who said he was honored to be invited and has had a long relationship with CEI that included relying on the group's analyses while a senator.

He also pointed out several elements of the energy plan that appeals to free market advocates.

"Our plan is defined by a distinct lack of faith in the capacity of government to pick and choose the best fuel or the best technology for the future," he said. "Ultimately, the market will answer that question."

Abraham said that in the next 20 years, overall energy consumption is expected to increase by more than 30 percent, oil demand by one third, natural gas by 62 percent and electricity by 45 percent.

He said that the United States produces 39 percent less oil than in 1970 and that 40 percent of domestic gas resources are off limits "or subject to restrictions that make it virtually impossible to develop."  He said hydroelectric power is expected to fall sharply.

Focus on Trade Offs and Supply and Demand

"Unless we change these courses and fill the gap between supply and demand, I believe we will face 70's-style gas lines and California-style energy miseries," Abraham said. "If we are going to avoid increasing dependence on foreign sources, we must somehow find a way to convince the American people that domestic power generation is not only essential, but consistent with their interest in clean and safe neighborhoods."

Despite Abraham's emphasis on serious policy debate, the evening got off to a playful start as former White House counsel C. Boyden Gray, who introduced Abraham, slammed Thursday's party jump by Vermont Sen. Jim Jeffords.

Abraham jocularly shrugged off Jeffords' switch, even while lamenting his own re-election loss to Debbie Stabenow for the Michigan Senate seat.

"I regret of course that I no longer occupy a page in (the) upcoming book, The Almanac of American Politics 2002, but I don't regret it quite as much as (Senate Majority Leader) Trent Lott does today," Abraham said. Lott will lose Majority Leader status in the wake of Jeffords' move.

Abraham also waxed comical about his current position, a post that both he and CEI at one time argued should be abolished.

"Had I known you could lose your way into the cabinet, I would have done it cheaper," he said.

Sharon Kehnemui is a digital marketing consultant and founder of Frequency Partners. She is a former senior politics editor for FoxNews.com. Follow her on Twitter @digisharon.