[Weekly Compilation of Presidential Documents Volume 41, Number 39 (Monday, October 3, 2005)]
[Pages 1461-1465]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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. 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

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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 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

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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 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.

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    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 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

    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,

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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 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 9th 
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.