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For Immediate Release
Office of the Press Secretary
May 3, 2001

Remarks by the President, Secretary of Energy Abraham and Deputy Secretary of Defense Wolfowitz After Energy Advisors Meeting
The Roosevelt Room

1:55 P.M. EDT

THE PRESIDENT: I want to thank you all for coming today. I've assembled a team within my administration, in particular, the Secretary of Energy, as well as the Deputy Secretary of Defense, to discuss energy.

As the country knows, we're in the process of developing a comprehensive energy plan that will work to increase supplies, as well as encourage conservation. This is a long-run solution to the energy problems we now face.

This administration is deeply concerned about California and its citizens. We're worried about blackouts that may occur this summer. And we want to be a part of any solutions. Since I became sworn-in, we've been working with the state of California to provide regulatory relief to encourage an increase in the amount of supplies available for the consumers in that state.

Today, I am instructing all agencies, federal agencies, to reduce their peak hour electricity use in the state of California. And the Secretary of Energy will be traveling to the state today to consult with the governor of the state of California, as well as work with our respective agencies in that state.

Secondly, I am pleased to report that the Secretary of Defense, after a careful review, believes that this Department, which has got a large presence in the state of California, can reduce peak hour usage by 10 percent -- and can do so without harming military readiness.

We're also -- and the Secretary is going to make it clear to the officials in the state of California that should Governor Davis, or any other governor, for that matter -- request power generating units owned by the federal government, they'll be available to help in the case of an emergency.

As well, FEMA, under Joe Allbaugh, is developing plans to help states that do face blackouts, to make sure the citizenry doesn't get harmed in any way.

This is a serious situation in the state of California. And as I said from the very beginning of my administration, we'll work to help California in any way we can. And the best way we can is to be good citizens. So I want to appreciate very much, Mr. Secretary, all your work, and I know you'd like to say a few words.

SECRETARY ABRAHAM: I'll be brief. As I think everybody knows from the very first day of this administration, the President has directed me and other members of the administration to work with California and respond to requests they have made -- whether it's to extend emergency orders, to make sure electricity and natural gas was provided, or to try to expedite permits so that new energy supply could be brought on line, we have done that consistently.

The Federal Energy Regulatory Commission has, of course, also ordered refunds where charges were unjust and excessive. We want to continue to play the role that we can to try to avert the most serious crisis confronting California, which is the now-anticipated 30 to 35 rolling blackouts that may hit the state during various peak periods this summer.

Today, I'll be traveling to California, I'll be meeting with the governor and then in the morning, with the representatives of all the federal facilities of the state to talk about ways that we can and to implement a plan to begin to reduce peak load usage at our federal facilities, so that we can play our part in trying to make sure we avert, to the degree we possibly can, blackouts this summer.

We consider this to be a top priority of the Department, so we're going to be maintaining close vigilance on those efforts and the agencies in California will be reporting back to me in 30 days on the measures they're taking to help make sure we achieve our objectives.

THE PRESIDENT: And we have with us Deputy Secretary of Defense Paul Wolfowitz.

DEPUTY SECRETARY WOLFOWITZ: The Department of Defense, I think, consumes roughly 1 percent of California's peak load, which does make us probably the largest single consumer in the state. And we are going to do our part to try to mitigate the energy shortage through a combination of conservation, power generation and investment in energy efficient methods.

With this initiative that the Secretary will be announcing -- Secretary Rumsfeld will be announcing this afternoon, we are focusing on reducing peak loads in California. And we plan by this summer to achieve a 10 percent reduction in our total electricity load from the California commercial grid during peak demand hours. That's a 10 percent reduction from the levels of 12 months before.

We're going to work down, hopefully by summer of next year, we'll be 15 percent below peak loads of a year ago. Ultimately, our investments should make some 200 megawatts of additional power available in California, the equivalent of building a 200 megawatt power plant. But 75 percent of that 200 megawatts will come from energy efficiencies; 25 percent will come from new power sources, including some fairly innovative ones, among them, hooking up the idle wind generation plant in the California desert to Edwards Air Force Base.

We'll be investing $32 million this fiscal year and $19 million in fiscal year '02. That $50 million investment should leverage almost $300 million from additional private sector investment and produce about $25 million a year in savings for Department of Defense operations when we're finished.

So as the President said, this not only provides energy efficiency for California, but frees up some funds to improve the operation of our bases in the state, as well.

Q Mr. President, are you asking federal agencies nationwide to cut back? And what will the White House do?

THE PRESIDENT: Well, I think we ought to ask all agencies to review energy policy. We're focused right now on California because that's a state that's going to suffer blackouts. But we've always got to be mindful of being energy efficient.

And since I've asked other agencies to review their policy, I'm going to ask the White House to do the same. Chief of Staff Andy Card has done just that today. We want to be good, efficient users of energy here in the White House.


Q Mr. President, your energy team is preparing a long-term report and the Vice President earlier this week gave a speech in Toronto that really, frankly, gave short shrift to the concept of conservation and concentrated, instead, on exploration, finding new ways to get natural gas pipelines built.

Will conservation be a primary focus of the long-term plan, or is this really just something that's for the here and now and the short-term in California?

THE PRESIDENT: Oh, I think conservation has got to be an integral part of making sure we've got a reasonable energy policy. But what the Vice President was saying is we can't conserve our way to energy independence; nor can we conserve our way to having enough energy available. So we've got to do both. We must conserve, but we've also got to find new sources of energy.

I haven't seen the final report yet, but I suspect the American people will find a balanced approach. But what people need to hear, loud and clear, is that we're running out of energy in America. And it is so important for this nation to improve its infrastructure so we can not only deliver supplies, but we need to go find new supply.

And I strongly believe we can do so in an environmentally friendly way. This nation is confronted with a major problem. And this administration is going to be honest with the American people about the nature of the problem and we're going to come up with some solutions. And it's going to take a lot of political will for people to buck some of the trends that somehow believe -- who believe that without finding additional supplies of energy, this nation is going to be okay.

Q If I could follow-up, sir? Will there be a more prominent role for nuclear power, as part of your plan?

THE PRESIDENT: You must wait until the report comes out, because I'm going to have to, too, until I see the final copy. But I would suggest that what this nation needs to do is review all options.


Q Sir, the Vice President seemed to be saying on Monday that Americans were already pretty energy efficient, so there's not much to be gained by conservation. Do you agree with that?

THE PRESIDENT: Well, I agree that we've made great strides in energy efficiency; home building materials are more efficient. But we just found a place where we can reduce energy during peak hours by 10 percent. We must continue to find.

But what the Vice President and I understand is that you cannot conserve your way to energy independence. We can do a better job in conservation, but we darn sure have to do a better job of finding more supply. It is naive for the American people and its -- and those who purport to speak for the American people, some of those, to say that we can be okay from an energy perspective by only focusing on conservation. We've got to find additional supplies of energy.

One thing this administration will do is we're going to do our part when it comes to conservation in the state of California. But we will be honest with the American people. And the American people need to have an honest assessment of the issues this country faces, not only short-term, but long-term. And that's exactly what the Vice President was saying the other day in Canada. And this report will be that way.

Steve, final question.

Q Sir, on the China policy, could you -- could I ask you to explain what happened yesterday with the Rumsfeld order, and what will it take now to have military-to-military exchanges with the Chinese?

THE PRESIDENT: In terms of what they call the tick-tock, you need to talk to the folks at the Defense Department. But what the Secretary was rightly doing was saying that we're going to review all opportunities to interface with the Chinese. And if it enhances our relationship, it might make sense. If it's a useless exercise and it doesn't make the relationship any better, then we won't do that.

But each opportunity will be reviewed on a case-by-case basis. That makes sense. We've only been in office for 104 days. We've got to review all policy that we inherited.

But what the Chinese must understand is that we'll be firm in our philosophy, consistent in our beliefs and we want to work to have a relationship that is a positive relationship for both countries.

Q Do you feel better after seeing Foreign Minister Peres this morning?

THE PRESIDENT: Had a good visit with him.

Q -- better after talking to him?

THE PRESIDENT: Well, he's an optimistic person. And I was so pleased that Mr. Peres came by. I don't know what his statements were like to the press, but he leaves knowing full well this administration is actively engaged at, first and foremost, trying to break the cycle of terrorism that grips that part of the world.

But he gave me a very good assessment of how he viewed the world. And he's always been an optimistic person, so I do feel better having talked to him. He's a fine statesman, as well.

Q Thank you, Mr. President.

2:06 P.M. EDT

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