Interview: Energy Secretary --- Spencer Abraham
>> energy secretary spencer abraham is one of six members of president bush’s cabinet announcing resignations this month. the secretary sat down with peter cook this week to talk about the last four years and his decision to leave the administration.
>> thank you for your time today. you decided to step down from your position. why is this the right time to resign?
>> i’m almost the long longest serving energy secretary in history and it’s been a great experience. i’ve very much enjoyed working for the president but i’m the only member of the current cabinet that has three elementary aged children so there are other family issues that have been balanced against the work we do in this job and we decided this was the right time to move on to something new but clearly it’s been a great privilege for me and look forward to continuing to be involved in politics and public affairs but from a different vantage point in the future.
>> you’ve had a busy time at the energy department. you had the blackout of 2003, the california power crisis just as you came into office. you pushed the recommendation for the president to move forward with the yucca mountain project. just a few of the things you’ve had to handle. what’s been the biggest challenge?
>> as a country, america’s energy security challenges have been dominating in the last few years and i predict they’ll be even more so in the future. we’re a country that keeps growing, our economy keeps growing and we need to meet that demand for energy consistent with a clean environment so trying to address those technologies and moving ahead with a way to address the nuclear waste industry, that’s been a big part of the job. it’s also, because of the nature of the department, we’ve done a lot of focus on issues related to national security, nuclear nonproliferation challenges also being a dominant issue during my years as secretary.
>> let me ask you about something that hasn’t happened during your time as secretary, an energy bill. to what extent are you frustrated that as you prepare to leave the job that you have not seen successfully an energy bill come out of congress?
>> when we announced the president’s energy plan, it had 105 recommendations, 95 of which we’ve been able to implement with executive action so it’s important for america to know we haven’t stood still. the remaining provisions, of which there are about 10, still need to be passed by congress. i’d love to have seen congress finish that job but the composition of the next congress will be such that we will pass an energy bill and i think we also will eliminate restrictions on developing alaska oil for america’s energy security needs so i’m optimistic it will happen soon and it doesn’t better me very much that i won’t be in this job when it happens.
>> you have no doubt that the next congress will pass legislation opening the arctic national wildlife refuge to% energy development?
>> i believe they will. i’d be very disappointed if they didn’t. i think the votes are there now and congressional leadership and the administration will work together to accomplish it. in my judgment, it should happen. you could never, of course, totally predict the future. but certainly the votes are there now for this to happen so my expectations are high and my view of this is positive.
>> i want to ask you about oil. here we are in the year 2004, we have energy, oil prices near $50 with a record high over $55 a barrel. nobody being have anticipated this when you first took office but is this something now that you think american companies and businesses need to prep for prices, say, above $40 a barrel for the foreseeable future?
>> our own projections are that we’ll see prices high into 2005. we have a tight market . we have a lot of worldwide demand increases we’re trying to demand including demand in asia that is rising. that’s a good sign of a strong, positive growing economy but i think you’ll see tight markets well into the future. what this argues for is not only developing anwr but also developing new energy technologies that allow for better extraction capability that allow for us to develop alternative fuels like hydrogen. we have to go back to the president’s energy plan and make sure it’s fully implemented on a long-term basis. otherwise, these periodic price surges will continue to afflict us.
>> are you convinced the opec members have done everything they can to boost supply?
>> i don’t think anybody doubt they’re producing at near full throttle. the problem is there has not been sufficient investment either in those countries or other parts of the world in terms of new production for the future. one of the top priorities, i think, for the world in the next few years is to try to make sure that sufficient investment in new energy projects, new oil and gas development projects, takes place. that―hopefully, the high prices we’re experiencing now will prompt that type of investment but it really is something that has to be a top priority item.
>> mr. secretary, thanks for the time.%
>> good to be with you.
>> energy secretary spencer abraham, former u.s. senator from michigan, does not rule out another run for office, he said. up next, positioning your portfolio for the new year. should you invest in financial stocks at a time when the fed is raising interest rates? you’ll hear from the experts when we come back.
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Listen Market briefing --- Bob (medium)
NYSE--- Julie (slow)
Nasdaq --- June (slow)
Holiday shopping season --- Su (fast)
welcome to “world financial report.” i’m bob bowden. stocks ended the friday session little changed. all three indexes could be described as little changed. virtually no motion in the dow, s&p and nasdaq on the shorened friday trading session. some conflicts reports out of china affecting the currency markets today. a chinese newspaper said the government moved money out of u.s. t bills to avoid losses from the weakening dollar. an official from china central bank denied knowledge of any action taken against the dollar. there’s speculation the european central bank will not step in to stop the euro’s rise, leading some banks to cut their forecasts for the dollar. when all was does and―said and done, this is the response on the mixed currency market for the day. that china story affecting the bond market , as well. investors are concerned china and other central banks will sell bonds because of the weakening dollar. according to the latest figure, china is the second biggest holder of u.s. debt after japan with about 174 billion dollars in holding. on wall street, the s&p and dow rose for the third week in four and steel makers led gains in the session. for more on the day’s trading action, here’s a report from julie hyman at the new york stock exchange.
>> even though stocks were little changed in today’s session, both the dow and s&p ended higher. the s&p, earlier in the shortened trading day, hit its highest since august 2001. it hit that level about two weeks ago and hit it again today. helped today from an unusual or unexpected industry, the steel makers, very strong today after a report that nissan would halt production at three plants due to lack of raw material, in this case steel. we saw steel makers rising, allegheny technology, u.s. steel, nucor and alcoa supporting the dow on that report. another metal doing well, gold trading near a 16-year high as the dollar declines. gold producing stocks doing well today with the gold and silver index higher. newmont mining, anglogold and goldcorp gaining. drug stocks gaining today. it looks like folks were buying up pharmaceutical stocks which have been beat up for the year to date, down just about 12% as a group for the year, the second worst performing industry group after semiconductors. some of the gainers in the session, merck, forest labs as well as pfizer. we talked to folks about whether they thought the rally would continue throughout the year. so far this quarter, the s&p 500 is up 6%. we talked to jeff saut, chief investment strategist with raymond james. he thinks there is more room for growth before year’s end. peter boockvar, equity strategist with miller tabak thinks we’ll stall from here until the end of the year because we have gained so much thus far and he thinks a lid will be put on growth in the markets because of the decline in the dollar and gains in interest rates. i’m julie hyman.
>> the nasdaq closed unchanged for the day and for the week added 1.5%. june grasso has details on today’s trading from the nasdaq marketsite.
>> shares of semiconductors were a drag on the nasdaq today. take a look at the philadelphia semiconductor index. industry group says global sales of semiconductors rose 22% in october from a year earlier. the semiconductor industry association said worldwide chip sales climbed 1.5% from september, a moderate degree of growth reflecting high inventories. fourth-quarter sales are expected to be essentially flat from the third quarter. leading the semiconductors lower we had intel, linear technology, kla-tencor, xilinx and we have hear many chip companies concerned about high inventories.apple computer advancing. analysts expect the company to announce in january that quarterly profit increased over the same period last year with the ipod digital music player surging in popularity and sales. shares have been climbing since monday when piper jaffray analyst gene munster said the stock may reach $100 within a year citing a survey that the ipod is boosting sales of other apple products. google shares rallied after a goldman sachs note suggesting shares may reach $215. anthony naoto rated the stock outperform in new coverage citing the prospect of 25% per-share earnings growth from 2006 to fort. overstock.com reached an all-time high today. taser share, biggest maker of stun guns, decline after a “new york times” report that a u.s. government study found the weapons could be dangerous. a company said that a study found the stun guns had no adverse effects and the company stands by that statement. i’m june grasso, bloomberg news.
>> taser shares have more than tripled year to date. this is the day the retailing industry waits all year for, black friday marking the official kickoff to the holiday shopping season when some retailers become profitable for the first time in the year. su keenan has more.
>> a lot of shopping going on out there. last year, the day after thanksgiving, proved to be the busiest shopping day of the year. analysts say this holiday season higher energy and medical costs may cause consumers to hold back at the cash registers. sales are expected to rise 4.5%, slightly less than last year’s record gain of 5%. nationwide, consumers are expected to spend $220 billion during this month and next. federated c.e.o. terry lundgren cautiously optimistic.
>> we expect november to be flat to 2% up and november 1% to 3% up.
>> toys ‘r’ us says the shopping season is off to a strong start with people lining up around the block as they opened stores at 5:00 a.m. this morning. >> people spend up to their budget in many cases. when they look to cut back, rarely do they cut back in toys. you have the regular big gifts and then stocking stuffer gifts, as well.
>> good year for the economy, he says. as for online retailers, sales forecasts are more optimistic. some sites, like radioshack dot com, began promotions yesterday. jupiter research believes easier to use sites and faster internet access are fueling sales.
>> we’ll have 83 million people shopping online this year versus 75 last year so it’s a big increase.% that’s where the sales increase in online shop suggest coming from, new shoppers.
>> as for the most popular gifts this season --
>> the whole sweater and outerwear business could represent 15% to 20% of some company’s sales and the sweater business has gone through a cycle with boredom and there’s innovative new product in the marketplace and vests have been popular and ponchos working well in the fall season so we’re headed for a solid overall sweater, outerwear business this year.
>> despite the sweater boredom issue. another hot item on the wish list, holiday gift cards, more than half consumers want them, the cards with the money in them.
>> innovation in the outerwear industry, according to that last guest.
>> good to know.
>> yeah. up next, conversation with outgoing energy secretary spencer abraham, he talks about his four years in the bush administration, the prospect of higher oil prices and much more.
