By Nancy Dunne in Washington Published: FT.com March 19 2001 18:40GMT | Last Updated: March 20 2001 07:27GMT The US faces a severe energy crisis and needs a new strategy to prevent supply falling far behind demand, Spencer Abraham, the US energy secretary, said on Monday. The energy sector in the US, the world's largest importer and consumer of oil, is "strained to capacity" and confronting its most serious shortages since the Arab oil embargo and petrol queues of the 1970s, he said. Mr Abraham used a speech to the US Chamber of Commerce in Washington to set out for the first time publicly the magnitude of the crisis the Bush administration believes it faces and the supply-oriented strategy it intends to adopt. A task force, chaired by Dick Cheney, vice-president, is to have the new policy ready in the next few weeks. Attacking the Clinton government for taxing demand and neglecting supply, Mr Abraham said the administration would announce a strategy to address "antiquated" infrastructure, rising demand and falling supplies. "Our last recessions were all tied to energy crises," he said. There was "strong evidence" shortages and higher prices were hurting US business. While he disagreed with last weekend's decision by the Opec oil producers' cartel to cut production in a bid to boost prices, he said it showed the importance of increasing domestic production. On current trends the US would soon be importing nearly two-thirds of the oil it consumes. Mr Abraham said all energy sources would receive support, though he raised doubts that many of the tax incentives and subsidies proposed by the industry would receive administration backing. Instead he stressed broad regulatory reform rather than financial support. The number of refineries had halved since 1980, he said. When President Bill Clinton last year released oil from the Strategic Petroleum Reserve to damp prices, it had to be sent overseas for refining. The US will need 65 new power plants a year to keep up with electricity demand. "This could be a conservative estimate," Mr Abraham said. He said drilling for oil on federal lands was restricted or forbidden. The administration is proposing to open a portion of Alaska's Arctic National Wildlife Refuge for drilling. The US will need massive construction of pipelines and transmission lines, costing $120bn-$150bn (#83bn-#104bn), he said. from FT.com _______________________________________________ CrashList website: http://website.lineone.net/~resource_base
