Samuel Bodman hosts Ask the White House

Samuel Bodman
Good afternoon. I'm Sam Bodman, U.S. Secretary of Energy. I know that given the terrible events in the Gulf of Mexico recently, many Americans are concerned about the effects the hurricanes are having on energy prices. In addition to doing all that we can to help the people who have been directly affected by the storms, we are also working closely with energy companies to restore electricity to the affected areas, repair damaged oil and gas facilities and keep oil and gasoline, and natural gas markets well supplied. Now, I would be happy any specific questions you may have.

Jo, from Austin, Texas writes:
Why doesn't the administration spend more time and money on developing cars that run on solar energy or hydrogen fuel cells?

Samuel Bodman
Actually, our Administration does have a major program underway to develop 21st century automotive systems that are powered by hydrogen fuel cells, rather than gasoline-powered internal combustion engines. This program was announced by President Bush in his 2003 State of the Union Speech, and we have committed an initial investment of $1.2 billion over the first five years as we work very closely with carmakers, energy industry leaders, and state, local, and international governments. Our efforts aim at developing the technology for commercially viable hydrogen-powered fuel cells to power cars, trucks, homes and businesses with no pollution or greenhouse gases. Another major benefit, of course, would be a dramatic reduction in our growing dependence on foreign oil.

rosalie, from bloomingtion libaray writes:
when will the gass prices go back down.

Samuel Bodman
Rosalie, that’s a question I get asked everywhere I go. Even at dinner my wife asks me. Unfortunately, I don’t have an easy answer. We are all consumers in the gasoline market and none of us like paying higher prices at the pump.

The price of a gallon of gasoline is determined by a number of different factors: the price of crude oil, federal and state taxes, refining costs, distribution and marketing costs, and, of course, supply versus demand. Much of the increase in gasoline prices that we saw prior to the hurricanes is in because of our growing global economy.

We’re seeing the growth of economies in places like China and India and as their demand for gasoline increases, the margin between how much gasoline the world produces and what the world consumes becomes very small, and that can increase prices.

Combine that with the impact the hurricanes are having on our Nation’s refining capacity, as Carl mentioned in a previous question, we find ourselves in the situation that we have today. I’m proud of my department’s response to the hurricanes. We have worked hard to ensure that our oil and gasoline markets are well supplied. As I mentioned earlier, we released oil from our Strategic Petroleum Reserve to help lessen supply disruptions. And we are working with energy industry officials to get a lot of production back online more quickly than a lot of people thought.

Having said all that, I am hopeful that we will see gasoline prices continue to moderate and possibly come down from the hurricane-related highs.

Jay, from Oak Ridge, New JErsey writes:
When will we see the oil reserve oil start supplying us at the gas pump so that we all don't go into further debt both as a country and as individuals?

We are using our Strategic Petroleum Reserve (or SPR) to ensure that markets are well supplied with crude oil.

Within days after Hurricane Katrina we began to loan crude oil from our Nation’s Strategic Petroleum Reserve (or SPR) to oil refineries so that we could maintain our needed supply of gasoline in cities and towns across the country. In addition, President Bush directed that oil from the SPR be made available for sale to companies who need it. Thanks to our Reserve, we have made more than 24 million barrels of oil available to companies to refine into gasoline for our Nation’s citizens.

President Bush has said that our Nation’s Strategic Petroleum Reserve is a national asset that can be used in the case of a severe supply disruption, a hurricane of the size and scope of Katrina and Rita certainly qualify.

On Monday when President Bush visited the Energy Department, he directed that if the market needs crude oil, we are ready to use the SPR again. I will immediately consider any further requests for loans from the SPR that will help get more gasoline to you and all Americans as soon as they come in.

Jo, from Owensboro KY writes:
Several of us were wondering how the gasoline companies could raise the price of gasoline before the hurricane's hit? Wouldn't this seem to be price gouging? Also, please convey to the President my utmost respect. While I do believe mistakes have been made during his administration, I believe he has done a good job under extremely difficult circumstances. I believe that he has had to face many circumstances that no other President has had to face since Franklin Roosevelt. I would vote for him again if he could run again.

I’ll be sure to tell the president what you said. I know he’ll appreciate it.

It is true that prices went before the hurricanes hit; but this is not necessarily price gouging.

In general the price of oil and gasoline often rises in anticipation of supply disruptions. Meaning that, as those who trade oil and gasoline on the markets see a storm coming, the notion that a storm will affect the overall supply of oil can raise the price, as they guess that the oil will become more valuable in the face of declining supply because of the hurricane. (This would work for anything, for instance a huge forest fire could affect the price of wood.)

And retail prices (the price we all pay at the pump) are affected by the increased market prices. Remember that crude oil and gasoline are commodities traded on international markets; retail prices reflect this. Fortunately, the anticipated interruptions in supply were not as severe as anticipated, so we hope the market will start to come back down.

And Jo Ann, if you or any of your friends think that you are seeing price-gouging at any of your local filling stations, please contact your state and local law enforcement authorities and let us know by logging in to our Gas Price Hotline at www.energy.gov or by calling 1-800-244-3301.

Francis, from Salt Lake City, Utah writes:
In order to conserve energy could the government encourage private business to go to a 4 day work week? Also can the president through an Executive Order mandate that government agencies wherever possible go to a 4 day work week, and what about the possibility of the Postal Service being mandated to not do Saturday residential deliveries? Thank You.

As the largest single energy consumer in the United States, the Federal government has both a tremendous opportunity and a clear responsibility to lead by example with smart energy management.

On Monday, President Bush issued a directive to all agencies in the federal government to conserve natural gas, electricity, gasoline, and diesel fuel. The President has directed all agencies to conserve fuel in an effort to reduce our overall demand and allow extra supplies to be directed towards the hurricane relief effort.

Specifically he asked that we curtail non-essential travel and other activities that use gasoline or diesel fuel, and encourage employees to carpool, telecommute, and use public transportation to reduce fuel use. He also wants us to conserve natural gas and electricity during periods of peak consumption by shifting energy-intensive activities to non-peak periods wherever possible and by using efficient Energy STAR-rated energy intensive appliances and products.

We encourage all Americans to be more energy efficient at home, in their cars and at work. Over the next few months, I will lead an effort to encourage consumers and businesses to take easy steps to be more energy efficient and save money this winter. Anyone can find tips on how to weatherize their home and save energy at www.energysavers.gov.

At the Department of Energy, we are always mindful of our energy consumption, but I have asked the Federal Energy Management Program in my department to assess ways that we can further reduce the overall use of energy in our facilities across the country.

Wulf, from San Lorenzo, CA writes:
Mr. Bodman,As you know California has a special blend of gasoline, so we can comply with our strict environmental regulations. I presume this gasoline is refined in California only. Why is it that when the refineries in the Gulf of Mexico are shut down for whatever reason, we in California experience an instantaneous increase at the pumps.

Retail gasoline prices are determined by a variety of factors, but most significantly by the price of crude oil, which is set by the global marketplace…So when there is a major supply disruption – no matter where it is – it can cause prices to go up. As I mentioned earlier, we are doing everything we can to keep markets supplied with crude oil, despite the significant impact on America’s oil production by the recent hurricanes.

Esther, from Wellington, Florida writes:
In order to conserve our fuelenergy supplies in wake of Katrina and Rita, has the government proposed changes to our traditional lifestyle such as:1. make schools run a Tuesday through Friday with additional instructional time attached to each of those four days. As a teacher with over 33 years in the classroom I can tell you kids stay at school either in daycare or clubs for the older ones for many hours just wasting time until parental pickup. This would save billions of gallons of gasoline with the busing we do in our county alone. It would not impede sports as they are a Friday night venue.2. All non essential businesses(retail and food) can curtail their mall hours and days to conserve fuel.These can be a temporary measure but really people spend way too much time and money getting into debt rather than staying home and developing familial ties. Thanks for your input and assistance to us all.

Samuel Bodman
Thanks Ester for your thoughts, and thank you for your service to your community by being a teacher.

As I said to Francis, President Bush issued a directive to all agencies in the federal government to conserve natural gas, electricity, gasoline, and diesel fuel. And we certainly encourage individuals, local governments and private businesses to conserve fuel in whatever ways seem most helpful. As for closing schools, that is a decision to be made at the local level in consultation with parents and the community.

But I would note that kids can help by encouraging energy efficiency at home and at school. They can visit the Department of Energy website at www.energsavers.gov for tips.

Tony, from Zion, Illinois writes:
Mr. Bodman, This has been horrible for the people in the gulf. How badly did these hurricanes effect the way we use our energy? Will there have to be enormous changes on how we use our energy here in the states? I also would like to know if the U.S. budget will be hit hard in the process?

Samuel Bodman
Thanks Tony, and you’re right, these hurricanes have been horrible for the people in the Gulf. But before I answer your question I want to tell you what I saw while I was down there. I visited the region twice after Hurricane Katrina and while there was a lot of devastation – through it all you saw the American spirit. There was hope in people’s eyes, even with their pain. But we’re going to rebuild down there, and we are going to help our fellow citizens get through this.

Regarding our energy use, these storms very well may have an impact in the near term, as we work to restore the oil and gas facilities that were damaged or shut down as a precaution. The storms struck one of our most important regions to America’s energy sector at a time when oil and gasoline prices were already high. In the short term, we would ask everyone to be conscientious about their gasoline use, and try to conserve as much as possible. In the medium term, I think that we can all see the need to expand the Nation’s oil-refining capacity, so that events like these hurricanes don’t have such a disruptive effect on our energy supply. And over the long term, I think we need to push forward aggressively with the President’s call for development and deployment of more alternative energy sources and the Hydrogen Fuel Initiative, so that we can power our transportation sector with clean and efficient hydrogen fuel cells, transcending our reliance on fossil fuels altogether.

Regarding the impact on the budget, no one knows for sure how much the recovery effort will cost, and we are working together to make sure that the federal government spends wisely and that it goes to meet the needs of those affected.

Paul, from Tucson, AZ writes:
Is the U.S. government actively pursuing the use of alternative energy sources like solar and wind power? Has it become readily apparent that our fossil fuel supplies are finite and that we must switch into a different gear?

Samuel Bodman
Alternative energy sources are an important tool and a growing part of America’s energy mix. Here at the Department of Energy, we are heavily invested in developing alternative energy sources - whether it’s in new solar and wind technologies or making liquid fuels from homegrown plants. In fact, we currently spend more research dollars on energy efficiency and renewable energy than we do on fossil fuel and nuclear energy combined. And it’s paying off.

The capacity of electricity-generating wind turbines has more than doubled and we continue to make progress in bringing down the cost of solar power. Next week I will be kicking of the Department’s second Solar Decathlon competition. This is a contest that brings teams of college students from all over the country, and even other countries, to compete to see who has designed the most livable, convenient and energy-efficient home powered exclusively by solar energy. Not only is this event a lot of fun, but it highlights the very latest in solar-power technology, while also increasing public awareness about the potential of solar energy, and training the next generation of energy-conscious designers, engineers and scientists.

Callie, from callieberkeley.edu writes:
Why are we not trying to push atomic energy at this time? I think the answer is because people do not want it at this time because of the enviromen. Even so, we need to explore this as a very crucial element of our energy problem. We need to get busy because we will be dependent on foreign oil and the global economy. -Callie

President Bush and I both believe that clean, safe nuclear power needs to be part of our energy mix. Nuclear power is the only technology we currently have that can generate large amounts of electricity without releasing a single particle of pollution into the atmosphere. Likewise, nuclear power plants emit no carbon or other greenhouse gasses.

Despite these benefits, our country has not built a single new nuclear plant in nearly thirty years. We need to change that. That is why we were very pleased that Congress has endorsed the president’s call for increasing our use of nuclear power. The Energy Policy Act, recently passed by Congress and signed by the President, takes a big step toward facilitating the building of new plants by providing federal insurance against possible legal or regulatory delays. These kinds of delays and roadblocks are one of the big impediments to expanding our use of nuclear power, and our Administration is working hard to fix that problem.

Anne, from Florida Keys writes:
What is the Bush administration doing to conserve fuel in their everyday privite life? It seem to me that flying here and there, seem to waste more enery then is neccessary for this time of year. I would be more then happy to save on my family and my fuel usage. If the Bush administration officials would do the same. No more wastful spending.

The White House actually addressed this just yesterday. In his meeting with reporters, Scott McClellan, the President’s Press Secretary, outlined many of the steps the White House is taking to conserve energy. This includes encouraging the staff to carpool or use mass transit, turning off lights and computers when not in use, doing more business electronically to reduce the use of printers, faxes, etc., and also reviewing the ways that the President’s travel arrangements can save energy.

The rest of the Administration has been asked to do this as well. So here at the DOE we are formulating our own plans to look for ways to save energy, in response to the President’s directive. We recognize that when we ask the American people to conserve energy, we need to do our own part here in Washington as well--and we are.

Michael, from Melrose Park, Il. writes:
Mr. Bodman, Good morning In light of all the recent fossil fuel shortage issues due to the recent hurricanes, I had thought. With all of the "National week of this or that" that we occasionally here about, how about having a National week of "Slow down". What I mean by this is that all drivers of cars and trucks on the nations highway systems would make a concerted effort to drive the speed limit. Test results from trials that I have conducted myself with my own vehicles has resulted in very favorable improvements in fuel economy. Also as a residual side effect, would be the improvements in safety and fatality rates. It's a win-win proposition all the way around.

Samuel Bodman
Michael, thanks for your suggestions, and you’re right there are a number of ways that people can save gasoline, including driving the speed limit. Driving slower can make a difference - Each 5 mph you drive over 60 mph is like paying an additional $0.15 per gallon for gas. Aggressive driving (speeding, rapid acceleration and braking) wastes gas. Keep your car maintained and running smoothly. Tune ups, clean air filters, properly inflated tires, and using the appropriate grade of oil all can help maximize fuel efficiency. There are also ways to use your engine wisely: avoid excessive idling and try to use cruise control and overdrive gears, for example. Planning your driving is also helpful - Running errands together, as opposed to making separate trips is a great gas saver. If possible, use mass transit, and telecommute. Lastly, keep your car light. Too often cars become long-term storage facilities and this can lead to poorer gas mileage.

Brianne, from Michigan writes:
What can I do to save save money on my heating bill this winter?

Samuel Bodman
Thank you for this important question Brianne. Due to an increased demand and with the impacts of the recent hurricanes, the cost of natural gas and home heating oil is expected to be more expensive than in past years…So, you’re smart to be thinking ahead about what you can do now to save money this winter. There are many easy things that consumers can do to prepare their homes for winter and save energy and money.

A few steps include using compact fluorescent light bulbs (CFLs) in place of comparable incandescent bulbs, installing timers on lights, and plugging air leaks with caulking, sealing, or weather stripping.

You can find more weatherization tops by visiting www.energysavers.gov or by calling 1-877-337-3463.

Sandy, from NY writes:
I know that the two Hurricans knocked out power to millions of people. Do you know when the victims will have electricity again?

Samuel Bodman
Our top priority after any major disaster is to ensure that life-saving and life-sustaining electricity is restored as quickly as possible to those people affected by the storm.

You’re right that millions of people lost power because of the two hurricanes. Utility companies were doing very well at getting power back on to those who lost it after Hurricane Katrina. In fact, they had gotten the lights back on for more than 2.5 million people. Then Hurricane Rita came.

Currently, there are about 1.2 million people without electric power in Texas, Louisiana, Arkansas, and Mississippi. We are working around-the-clock with the utility companies in the region to try to restore electricity as quickly as possible. The repairmen and women are doing heroic work on the lines to get power back up. Every day we are seeing progress and more and more people are getting electricity, but it will take some time before our job is done.

Frank, from Kansas City, MO writes:
How can consumers tell if they are victims of price gouging?

Samuel Bodman
The Department of Energy is very concerned about the impact of gasoline prices on American families. While we are working to address longer term supply issues, we're also working to make sure American families are being treated fairly.

After tragedies such as these hurricanes, most Americans band together and help one another out; however, we recognize that there may be some bad actors.

If you think that there may be price gouging going on, we recommend you take the following steps:

First, get gasoline at a different filling station. Next, report any possible price gouging to state and local authorities. Third, let us know by logging into our Gas Price Hotline at www.energy.gov or by calling 1-800-244-3301.

The Department is in contact with the Federal Trade Commission, The Department of Justice and states’ attorneys general who will investigate any suspicion of price-gouging, price-fixing or collusion.

Carl, from Los Angeles writes:
What are you doing to re-open the oil refineries shut down by the hurricanes, so gas prices dont keep going higher?

Samuel Bodman
Thanks for your question Carl. I know that this is a question that many Americans have.

We are in regular contact with oil refiners and discussing with them what they need to get back up and running. We recognize that because of the damage caused by the hurricanes, some of the refineries will take several days or weeks to come back online. The good news is that already this week eight refineries that were shut down as Hurricane Rita approached are going to reopen this week and the pipelines that ship much of our gasoline from the refineries to towns and cities across the country are up and operational.

We have been working hard, since even before Hurricane Katrina hit, to help make sure that our oil and gasoline markets remain well supplied. By keeping the markets supplied we hope that prices that spiked after Hurricane Katrina would soon moderate. Immediately after Hurricane Katrina, we began loaning oil from our Nation’s Strategic Petroleum Reserve (or SPR) to help refineries continue to operate and get gasoline to people throughout the country. We also used a number of other tools to help get more gasoline out to consumers, including temporarily waiving EPA requirements to allow the use of certain types of gasoline throughout the country and working with our international partners to import more oil and gasoline to U.S. towns and cities.

Currently, there are still four refineries that are shut down as a result of Hurricane Katrina and eight that are shut down as a result of Hurricane Rita. This accounts for well more than 1 million barrels (42 million gallons) per day of gasoline, about 800,000 barrels (33.6 million gallons) per day of distillate fuel, and over 300,000 barrels (12.6 million gallons) per day of jet fuel that is not being produced as long as these refineries remain shutdown. We will continue to work with these refineries to identify what we can do to help them get back online.