By
The Associated Press
WASHINGTON - Energy Secretary Spencer Abraham said yesterday the country is facing the most serious energy shortages since the 1970s. Without a solution, he said, the energy crisis will threaten prosperity and national security and change the way Americans live.
Abraham, in a speech hours before a special energy task force was to make recommendations to President Bush, said California's power problems are neither isolated nor temporary and could spread to other parts of the country, including the Northeast.
"The power crisis isn't just pinching our wallets, it's changing the way we live our lives," Abraham said in a speech described by aides as his most comprehensive assessment of the country's energy concerns since becoming energy secretary.
Abraham said the demand for energy "is rising across the board," but particularly for natural gas and electricity. As he spoke, the Energy Department also was raising concern of possible gasoline price spikes this summer.
The department said both crude-oil inventories and gasoline stocks are 6 percent to 7 percent lower that what they traditionally have been this time of year.
The estimates came even before calculation of the potential impact of a decision last week by the Organization of Petroleum Exporting Countries to lower production by 1 million barrels a day.
John Cook, chief petroleum analyst for the department's Energy Information Administration, called the current inventory levels a disturbing sign for this summer's heavy driving season.
While stocks likely will increase somewhat, "We are beginning the driving season with very little stock cushion," Cook said in remarks prepared for an oil refiners' conference in New Orleans.
Abraham, addressing an energy conference sponsored by the U.S. Chamber of Commerce, said the administration is determined to pursue "a rational balance between our energy needs and our environmental concerns."
He gave no details about the proposals expected to be presented to Bush by the energy task force headed by Vice President Dick Cheney. He said the administration's policy "will stress the need to diversify America's energy supply."
Abraham said it is a myth that oil companies and power companies are "engaged in a massive conspiracy to gouge consumers."
"There is no magic source of supply, no hidden pool of energy that can be turned on and off like a faucet," he declared.
Energy analysts are concerned that this summer will bring not only another round of power blackouts in California and possibly other states, as well as increases in the cost of not only electricity, but also gasoline during the peak summer driving season.
Gasoline prices nationwide for all brands average $1.41 a gallon, slightly lower than in recent weeks, the Energy Department said.
While the DOE earlier this month predicted prices at the pump this summer would increase modestly to about $1.49 on average, analysts said they would not rule out severe price spikes beyond that should supply problems develop.
Last year gasoline soared past $2 a gallon in some parts of the country, especially in the Midwest.
In a presentation to the refiners conference, Cook said gasoline stocks in the Gulf Coast area are nearly 13 percent below the normal five-year average, and 9 percent lower than at this time last year.
"For crude oil the situation is not much better," said Cook.
Nationwide, he said, crude stocks are 7 percent below the low end of the normal range for this time of year.
While the impact of OPEC's latest production cuts is not expected to show up in the U.S. market for six to eight weeks, it is likely to aggravate stock supplies even more, analysts said.
