If the government was exploring every possibility to cut oil prices)
>> welcome back. we’ve talked about the slowdown in the economy, and one major reason for that their may be the high cost of oil. oil reached a new intraday record. crude oil futures in new york finished the session a bit higher today. as a matter of fact, close to another record or it was another record. there are renewed concerns about supply disruptions. iraq cut oil shipments to tankers in the persian gulf because of warnings of attacks. energy prices sitting near their highest levels ever. we sat down with u.s. secretary of energy, spencer abraham, and asked him if the government was exploring every possibility to cut oil prices.
>> we have producers almost at full capacity. there’s not a lot more that can be done on the supply side but demand continues to rise and that’s fueling these high prices. there’s obviously these uncertainties, too, and they play a role but the fact is that demand both in america and around the world keeps growing. one thing that would make a difference would be if the% united states congress would pass an energy bill, sending the right signals to the marketplace in terms of america’s readiness to do the sorts of things we need to do to improve energy security by increasing production on the one hand and on the other hand increasing energy efficiency.
>> that is certainlying this something that could help supplies down the line. but in the shorter time frame.
>> no, i think it would have an impact, actually, on the market psychology immediately because i think our failure to pass an energy bill for three years, which is about the duration, now, we’ve been working on it, has sent such a negative signal that i think that’s influencing market psychology, as well. and i think evidence that there’s going to be a change will affect the investment strategies of people in the market .
>> you’ve said one of the biggest problems right now is that supply and certainly we are at capacity in terms of supply, so really demand is the issue.
>> right, and if people think there’s not going to be any changes so that in the future growing demand cannot be offset by changes in either efficiency or more production, i think that’s affecting how the market operates. i do think passage of an energy bill would be a key step that we really need.
>> suzy assaad asked sect abraham for his outlook on where prices may continue.
>> we think the market should be allowed to work. we think that some of the decisions that have been made over time, obviously, which were based on projections by opec of what demand would be or supply should be, are not ever going to be as good as letting the market work and our overriding message has always been to not try to predict things but to let the market function in terms of oil and i think that would be going forward the best way to set the price of oil, not to have people speculate about what a good price is, but let the market determine the right price.
>> we want to move on to the blackout. obviously, we’re coming close to the anniversary, when we remember what has been done over the last 12 months. it looks like congress still has not made the voluntary reliability standards mandatory. the standards themselves still have not been finalize by the industry regulator. what has been done over the last 12 months to ensure we don’t have a repeat of last year?
>> i should mention, another good reason for the passage of an energy bill because the same energy bill that would affect the oil markets would give us the mandatory reliability standards to be enforced. first and foremost, we need congress to take the action that’s overdue. but we’ve been busy. we recognize in the wake of the blackout that we needed to study it closely and intensely. we did, the united states and canada created an international joint task force. in april, we released the results with 46 recommendations, only one of which were mandatory reliability standards although they are the most important thing that can be done. but we’ve been acting to try to make sure that in the future we can minimize the chance of a repetition of last year’s blackout. we have subjected every operator in the country who operates one of these systems, no matter how experienced and professional they are, has, in the last year, entered in to a very intense emergency training program to train them to handle emergencies better. we conducted readiness audit in 23 regions of the country, not just the area that was the triggering point for last year’s blackout but other potential areas where crisis have the possibility of occurring. we have taken a lot of other actions, as well, suzy. i’m confident the combination of those actions even without congressional action has at least reduced the risk. it doesn’t ever eliminate it. i’m never satisfied that’s the case that we’ll never have a blackout but we think we’ve taken good action.
>> that was spencer abraham, u.s. secretary of energy. friday’s disappointing jobs report continues to weigh on the market . economists we surveyed are cutting their third-quarter forecast for u.s. growth. we’ll bring you that story next.
