Editor’s note: This is the first of a new series of regular columns for Hart Energy written by longtime industry editor Jeff Share. Opinion of Hart Energy columnists are their own.
So many words were said in tribute following the death of President Bush, but overlooked was one of the most important accomplishments of his administration and certainly one of great significance to our industry: the passing and signing of the Energy Policy Act of 1992. With that piece of legislation, Bush, himself a former Texas oilman, did more for the industry than any of his predecessors or successors.
Coming less than three years after the Exxon Valdez disaster in Alaska, petroleum was not a popular topic. Opposition came from the environmental movement, political leaders of both major parties and much of the public who were against providing any concessions to an industry already suffering from historically low prices that was decimating the services sector and the independents. And as we’ve seen before, even some influential members of the petroleum industry itself were opposed to any legislation from which their companies would not directly benefit.
Bush himself gave the lion’s share of credit for spearheading the Energy Policy Act’s passage to retired Admiral James Watkins, his blunt-speaking, no-nonsense secretary of Energy, 1989-1993. In a comment provided to me for a column in Pipeline & Gas Journal following Watkins’ death in 2012, Bush credited Watkins for leading the fight against tenuous odds. But in a pair of interviews I had with Watkins for my book, The Oil Makers, Insiders Look at the Petroleum Industry (1995 Rice University Press), Watkins left no doubt who the real driving force was: #41.
“I don’t find there is much political interest in energy. I didn’t even during the debates on the energy strategy. It just wasn’t that significant to the public until we went into debate on the environmental aspects of energy production, like ANWR or the Outer Continental Shelf. Then the debate got very political.
“But until we bring environmental activists into play, it’s kind of a ho-hum type of issue that doesn’t seem to have political clout. It’s a shame. It’s like education. It’s critical to our economy and our future competitiveness and yet it doesn’t seem to rate very high on the political agenda. Until we have a broader view taken, I don’t see that politicians want to take on any new enemies in their local campaigns,” said Watkins in comments still prescient a quarter-century later.
Now is when our discussion really heated up, and Watkins was happy to name names.
“President Bush was with me, and that’s the only way I was able to get it through. I had many people in the administration—the Office of Management & Budget and Treasury, principally Dick Darman (OMB) and Nick Brady (Treasury)—and Cabinet members who were very much opposed to any energy strategies – who thought it wasn’t necessary and that I was getting into free market issues we shouldn’t be getting into.”
Also looming was the upcoming presidential election and members of the White House staff, in particular crusty Chief of Staff John Sununu, thought it politically unnecessary to raise issues that didn’t need exposure, especially considering that the president had a 71% approval rating, Watkins recalled. Bush, however, was determined to save the nation’s tottering independent oil and gas producers, and ultimately succeeded. Perhaps it was that same determination that led to him lead the global coalition that kicked Saddam out of Kuwait.
“But President Bush wanted it because he felt it was right. He had experience in the oil and gas industry. He felt very strongly about the independents and the support they needed. He knew it was essential. He had been in politics long enough to live through a couple of energy crises—the Persian Gulf War was a striking example of that—and he felt strongly that we needed an integrated energy approach.
“Had it not been for him, I could not have done it. The bureaucrats were unable to persuade him otherwise, fortunately. It was the only substantive piece of legislation passed during his last year in office,” Watkins said, adding, “This is one area again where President Bush got very little credit. When we announced in Louisiana that the bill had passed and he signed it, there wasn’t any big groundswell of support nationally. And yet people complain about a nickel rise in gasoline prices.”
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