Oil, Other Energy Problems Await Bush

W A S H I N G T O N, Jan.2 -- Three days before George W. Bush isinaugurated president, OPEC oil ministers will meet in Vienna andin all likelihood slash oil production, raising crude pricesworldwide.

It’s not what the new president will want to see.

A former oilman himself, Bush faces a multitude of energyproblems beyond resurging oil prices that could present hisadministration with its first crisis as much of the country copeswith a sweep of arctic-driven cold.

Among them: Fear of heating oil shortages in the Northeast,record high natural gas prices across the country, and soaringelectric bills and threat of blackouts in California.

Production Problems

Bush has tapped energy industry board rooms for some of his topadvisers, including his vice president and his secretary ofcommerce. For all of them, the answer to the country’s energyproblems is production.

“When we’re undersupplied [in the energy field] as a nation anddemand increases, prices will go up,” Bush told reportersrecently, vowing to find ways to boost supplies of natural gas, oiland coal for America’s energy-hungry society.

But those are long-term solutions.

“There is not much the president can do in the near term totake care of these prices, except put measures in place that have apsychological effect, that calm the market,” says Jay Saunders, anenergy analyst for Deutsche Banc Alex. Brown.

Campaign PromisesNevertheless, Bush’s first few months in the White House mayseverely test his campaign pledge to reshape the nation’s energypolicy.

The immediate issues include finding better ways to cajoleOPEC oil producers to hold prices down, boosting domestic energysupplies and grappling with a rapidly changing — some sayunreliable and dysfunctional — electricity supply system.

“There’s no magic wand that he can wave. It’s just not in the cards,” says Robert Ebel, director of energy programs at theCenter for Strategic and International Studies. “He’s going tohave to look down the road on how he can improve the situation andkeep it from happening again.”