    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book II)]
    [September 26, 2005]
    [Pages 1485-1490]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks at the Department of Energy and an Exchange With Reporters
    September 26, 2005

    Energy Supply

        The President. I want to thank Secretary Bodman for welcoming us here at the Energy Department; Secretary
    Norton. We've just had a full briefing on
    what we know thus far about the effects of Hurricane Rita on the energy
    situation in the Gulf of Mexico.
        A lot of our production comes from the gulf, and when you have a
    Hurricane Katrina followed by a Hurricane Rita, it's natural,
    unfortunately, that it's going to affect supply. There's about 1.56
    million barrels of oil that is shut in. And before Rita, just to put
    that in perspective, that was approximately 880,000 barrels a day that
    was shut in due to Katrina, so that when you really look on a map you
    have, if you follow the path of Katrina and the path of Rita, it pretty
    much covers a lot of the production in the Gulf of Mexico.

        Right now the producing companies are assessing damage to the
    platforms and rigs. It's important for our people to know that we
    understand the situation and that we're willing to use the Strategic
    Petroleum Reserve to mitigate any shortfalls in crude oil that could
    affect our consumers. And I've instructed the Secretary of
    Energy to be mindful once again about the
    effects of the SPRo and how it can help settle price. He did a fine job
    after Katrina, and we're paying close attention to the markets as we
    speak.

        Secondly, gasoline prices, obviously, are on our mind, and so we've
    watched very carefully the assessments done on the refining--the
    refineries there on the gulf coast.

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    There are a lot of--a lot of gasoline refineries in the Houston area, in
    the Beaumont area, in the Port Arthur area, as well as Lake Charles, and
    the Louisiana area. There was about 5.4 million barrels per day that
    were shut in as a result of Rita and Katrina. A million of it is back up
    already, and we expect another 1.8 million barrels a day to get back on
    line relatively quickly because the storm missed a lot of refining
    capacity down the Texas coast.
        We don't know yet about 1.7 million barrels a day that were located
    right in the path of Rita. And the Secretary has got his people in contact with the energy companies to
    find out exactly what we have to deal with. About 900,000 barrels a day
    are still shutdown as a result of Katrina. For those of you who went
    with me to the Chevron plant in Pascagoula, Mississippi, might remember
    the size of that facility and the scope of the damage it had sustained.
    They're working hard to bring these plants back up.
        The other thing that's going to affect the ability for people to get
    gasoline is, of course, the pipelines. In other words, you manufacture
    the gasoline in a refinery, and you have to ship it across the country.
    There's three of the four major gasoline pipelines--three of the four
    pipelines in the affected area are major gasoline pipelines that supply
    the Midwest and the east coast.
        The Plantation Pipeline, which is an east coast pipeline, is at 100-
    percent capacity. That's one of the real success stories of this storm.
    In other words, it didn't go down at all. Colonial, which sends gasoline
    up to the Midwest, is at 52-percent capacity. It will soon be about 70
    percent and should be at 100 percent by the end of the week. The
    Explorer in the Midwest, sending gas to the Midwest, is at 67-percent
    capacity, should be at 100 percent next week. The Capline, which sends
    gasoline to the Midwest as well--it's a major crude pipeline, by the
    way, that sends crude to be refined in the Midwest--will be at about 75-
    percent capacity now, and obviously they're going to do everything they
    can to get it up to capacity.
        My point is, is that the storm affected the ability to get gasoline
    to markets. I know the Governors of Florida and
    Georgia have done some creative things to try
    to anticipate what will be a temporary problem. Governor Perdue of
    Georgia I thought did a--showed some leadership by saying we've got to--
    anticipating a problem, ``Here's what we need to do to correct it.''
        There's going to be some, by the way, and here's what we have done
    and will continue to do. We have suspended certain EPA winter-blend
    rules so that it makes it easier to import gasoline from overseas. In
    other words, there's a supply of gasoline in Europe, and by suspending
    these rules, it's a lot more likely to be able to get gasoline into our
    markets. And so while there's a shortfall because of down refining
    capacity, we will work with--we have instructed EPA to leave the rules
    in place--or to suspend the rules that were in place, keep the
    suspension in place, which would make it easier to increase supply and
    continue to get supply of gasoline here. And that's important for our
    consumers to know.
        In Houston, the challenge in Houston, as I understand it, is to get
    drivers and trucks into Houston so they can deliver gasoline to the
    retailers. And the Secretary is working
    with the local authorities there to help do anything we can to help get
    that done so that people in that big city will be able to get some
    gasoline. Beaumont, Port Arthur are still under assessment. We're not
    sure yet the full extent of the damage.
        I'll be going down there in the area tomorrow, and by then there
    will be a pretty clear assessment. I look forward to dealing with
    local--talking to local leaders about what--the situation and the
    problems they face.
        Let me repeat, we'll use the Strategic Petroleum Reserve to help
    refineries with crude oil. We will continue the waivers to allow the
    winter blends of fuel to be used

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    throughout the country. We will continue to waiver that--to allow
    broader use of diesel fuel, because we understand there's been a
    disruption in supply, and we want to make sure that we do everything we
    can to help with the supply disruption.
        The Homeland Security waived the Jones Act on restrictions on fuel
    transportation. We're allowing foreign-flag ships to temporarily
    transport fuel from one U.S. port to another. That's going to be
    important for expediting supply to deal with bottlenecks. We will
    continue that waiver. The Treasury and IRS announced that dyed diesel
    fuel for off-road use would be allowed on on-road use without penalty.
    In other words, we're taking action to help deal with the shortfall
    caused by Katrina and Rita.
        Two other points I want to make is, one, we can all pitch in by
    using--by being better conservers of energy. I mean, people just need to
    recognize that the storms have caused disruption and that if they're
    able to maybe not drive when they--on a trip that's not essential, that
    would be helpful. The Federal Government can help, and I've directed the
    Federal agencies nationwide--and here's some ways we can help. We can
    curtail nonessential travel. If it makes sense for the citizen out there
    to curtail nonessential travel, it darn sure makes sense for Federal
    employees. We can encourage employees to carpool or use mass transit.
    And we can shift peak electricity use to off-peak hours. There's ways
    for the Federal Government to lead when it comes to conservation.
        And finally, these storms show that we need additional capacity in
    America. We need additional refining capacity, for example, to be able
    to meet the needs of the American people. The storms have shown how
    fragile the balance is between supply and demand in America. I've often
    said one of the worst problems we have is that we're dependent on
    foreign sources of crude oil, and we are. But it's clear as well that
    we're also really dependent on the capacity of our country to refine
    product, and we need more refining capacity. And I look forward to
    working with Congress, as we analyze the energy situation, to expedite
    the capacity of our refiners to expand and/or build new refineries.
        It is clear that when you're dependent upon natural gas and/or
    hydrocarbons to fuel your economy and that supply gets disrupted, we
    need alternative sources of energy. And that's why I believe so strongly
    in nuclear power. And so we've got a chance, once again, to assess where
    we are as a country when it comes to energy and do something about it.
    And I look forward to working with Congress to do just that.
        I'll be glad to answer a couple of questions. Nedra [Nedra Pickler,
    Associated Press].

    Race, Poverty, and the Hurricanes

        Q. Thank you, Mr. President. I want to ask you about a different
    result of these storms, and that is the racial divide that's been
    exposed in this country. Blacks and whites feel very differently about
    what happened. We all recognize that the response to Rita was much
    better than the response to Katrina, but there are some strong feelings
    in the black community that that difference had a racial component to
    it, that the white, you know, rural residents got taken care of better
    than the black urban residents did. How do you respond to that?
        The President. Well, I think about Houston, my own hometown of
    Houston, which is an incredibly diverse city. And we had what looked
    like a category 5 hurricane headed right for Houston, and the Federal,
    State, and local officials worked together to warn the citizens of the
    impending storm. The message wasn't sent to one group of people; it was
    sent to the entire city. I mean, Texas is a diverse State. The rural
    part of Texas you're talking about has got a significant African
    American component to it. But I can assure you that the

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    response efforts, and now the recovery efforts, are aimed at--aimed at
    saving everybody. And the response was directed toward everybody.
        I think that what a lot of Americans saw was a--some poverty that
    they had never imagined before. And we need to address that, whether it
    be rural or urban. And I have done that as the President. I have said
    that education systems that simply shuffle children through are--can be
    discriminatory in nature. And therefore, we've got to have high
    standards and high expectations and focus money on Title I children to
    teach--so that children can learn to read. And we're beginning to make
    progress.
        I have said that ownership is a way to counter poverty and being
    stuck in impoverished situations, and so homeownership is up. And
    business ownership is up amongst minorities. I have said that the faith-
    based programs are more likely able to address some of the hopelessness
    of people and therefore have empowered faith-based programs to interface
    with people. We've promoted mentoring programs for children whose
    parents might be in prison, as a way to help provide hope for people.
        But this is an issue that this country must continue to address.
    Poverty is an issue that's an important issue, and poverty exists in New
    Orleans, Louisiana, and it exists in rural Texas, and it needs to be
    addressed in a significant way.
        Toby [Tabassum Zakaria, Reuters].

    New Supreme Court Nomination

        Q. Mr. President, now that Judge Roberts is heading for
    confirmation, how close are you to choosing your second nominee for the
    Supreme Court? And how much of a factor is diversity going to be?
        The President. First of all, I will--I'm cautiously optimistic about
    Judge Roberts' vote in the Senate. I
    will--he's done a fantastic job of showing the Senate and the American
    people he's not only a brilliant person but a decent person with a great
    heart. And so I await confirmation and hope it goes well. It looks like
    it might.
        Your question indicated that it looked like it was headed in the
    right direction. I will withhold judgment until the Senate exercises
    their consent, part of the advice-and-consent relationship with the
    White House.
        I have interviewed people from--in the past and thought about people
    from all walks of life. And I will put the person in to do the job. But
    I am mindful, you know, that diversity is one of the strengths of the
    country.
        Any other questions? Yes.

    Federal Response to Disasters

        Q. Thank you. In suggesting that the Department of Defense might
    become the first-responder in catastrophic disasters, are you not
    conceding that the Department of Homeland Security is not up to the
    task?
        The President. Oh, no, no let me--I appreciate you asking that
    question. One of the reasons I went out to NORTHCOM was to see the
    operations there, to look at how well organized NORTHCOM is, to listen
    to them talk about lessons learned from a major storm like Katrina, to
    think about ways for our country to properly respond to a catastrophic
    event, whether it be a natural catastrophic event or perhaps a terrorist
    attack.
        And what I want the discussion to--I want there to be a robust
    discussion about the best way for the Federal Government, in certain
    extreme circumstances, to be able to rally assets for the good of the
    people. I don't want to prejudge the Congress's discussion on this
    issue, because it may require change of law.
        But I do want them to think about a circumstance that requires a lot
    of planning and a lot of assets immediately on the scene in order to
    stabilize. And so what I was speculating about was a scenario which
    would require Federal assets to stabilize the situation, primarily DOD
    assets--DOD assets, and then hand back over to

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    Department of Homeland Security, for example. And I think it's very
    important for us as we look at the lessons of Katrina to think about
    other scenarios that might require a well-planned, significant Federal
    response right off the bat to provide stability. That's what I was
    talking about.

    Kuwaiti Oil Proposal/New Domestic Refineries

        Q. Mr. President, you had mentioned refining capacity. I'd like to
    ask you about an offer from the Kuwaiti oil minister, who has said that
    he is willing to offer to build a capacity--a refining capacity in the
    U.S. It would be the first time in about 30 years. Says he's asked for
    White House assistance--assistance getting permits and Federal support
    and so forth. What do you think of a proposal like that?
        The President. I am for increasing supply, because I understand when
    the more supply there is of a product, that will take pressure off of
    price. I haven't seen this specific proposal. But I've also talked to
    U.S. refiners who have said, ``We'd like to expand onsite, but the
    amount of paperwork necessary to do so is staggering.'' The issue of New
    Source Review, for example, is one that we've reviewed and said that,
    for the sake of, in this case, the expeditious expansion--and wise and
    careful expansion--of refining capacity, we ought to look at those rules
    and regulations. And yet we're back in court.
        And so I think if you take a good look at what it means to build a
    refinery or expand a refinery, you'll find there's a lot of regulations
    and paperwork that are required, thereby delaying the capacity for more
    product to come on to the market and discouraging people from doing--
    building refineries. That's why we haven't had one since 1970-something.
        So it's an interesting offer, and we'll, of course, look at it. The
    first thing we need to look at is how to encourage people to do just
    that without getting--without all kinds of time being taken up through
    the bureaucratic hurdles.
        Okay, thank you--yes, ma'am.

    Reconstruction in the Gulf Coast

        Q. Some have called for the continued idea of the reconstruction
    czar. Has your administration reconsidered having someone in charge, a
    Federal person of the----
        The President. Yes, ``reconsidered'' means we've ruled it out. I
    never have. I'm considering. ``Reconsidered'' means at some point in
    time, I decided not to have that. But I think the idea of having a
    Federal interface with local folks might be--might be a good idea.
        First things first, however. Remember in my speech in New Orleans, I
    strongly said that this reconstruction vision ought to be a local
    vision. And if you might remember, the other day I went down to
    Mississippi and was with Governor Barbour and
    Jim Barksdale--he was the founder of
    Netscape, a local business guy who has put together a group of
    distinguished citizenry to help plan what south Mississippi ought to
    look like. And we'll see what else emerges--comes from that idea in
    Louisiana.
        But the idea is, once these groups get up and running, they're going
    to have to interface with the Federal Government. And so I'm considering
    how best to balance the need for local vision and Federal involvement.
        Now, there's going to be a lot of Federal involvement because we're
    going to spend money--wisely, I might add. And so it's an idea that I'm
    still considering. And I want to watch--because the reason why I'm
    comfortable about saying ``still considering'' is because we're still
    recovering. And we've got a lot of work to do to recover. I mean, when I
    go down to Mississippi, I appreciate the vision that they're beginning
    to think about, but my first priority was to help those local folks
    remove debris. And then the next question is, what do

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    we do with the debris once it's removed? And there's a lot of immediate
    needs.
        If I were to go down to New Orleans today--I'm not--if I were, I'd
    be talking to the mayor; I'd be interested in
    the vision--but I'd be more interested in how we're going to get that
    water out of the ninth ward. And so I'm now interested--the next step of
    the recovery is how to get temporary housing in place, to get workers
    back so that jobs can get cranked up again.
        In terms of Texas, when it comes to where my thought process is now,
    I'm interested in getting electricity to people and gasoline to people.
    But the vision element of reconstruction is just beginning, and there
    may be a need for an interface with a particular person to help make
    sure that the vision becomes reality. It's a long answer to a short
    question.
        Thank you all. Appreciate it.

    Note: The President spoke at 10:59 a.m. in the Emergency Operations
    Center at the U.S. Department of Energy. In his remarks, he referred to
    Gov. Jeb Bush of Florida; Gov. Sonny Perdue of Georgia; Gov. Haley
    Barbour of Mississippi; James L. Barksdale, chairman, Governor Barbour's
    Commission on Recovery, Rebuilding, and Renewal; and Mayor C. Ray Nagin
    of New Orleans, LA. A reporter referred to Minister of Energy and Oil
    Ahmad Fahd al-Ahmad Al Sabah of Kuwait.