Remarks by the Vice President at the Annual Meeting of the Associated Press in Toronto

Royal York Hotel

Toronto, Ontario

Thank you very much. Thank you all very much, and thank you, Don. It is good to be here. I have been looking forward to my first trip abroad as Vice-President.

I have been a frequent visitor to Canada over the years. When I was in Halliburton, we did a lot of business up here. I am an avid fisherman. As a matter of fact, I was on a fishing trip on the Miramichi out in New Brunswick when I first entertained the notion that I might some day want to go to Halliburton.

I am often asked why I left government after 25 years back in 1993, and I explained that there were two reasons, really; one, we lost an election; but secondly, I explained that I had reached the point in life where I was mean-spirited, short-tempered, intolerant of those who disagreed with me, and they said, "Heck, you'd make a great CEO." So that's why I left government.

I don't get many chances to leave Washington these days. With an evenly divided Senate, of course, I have to stay pretty close to home. While we gather here in Toronto today, President Bush is hosting a lunch at the White House for Congress. That was the best way we could guarantee no tied votes while I am out of town.

Walter Mears, I want to thank you for the invitation. Just seeing Walter reminds me of the Presidential Election of 1976, when I was President Ford's Chief of Staff. When the campaign was over, Walter had earned himself the Pulitzer. For my part, I was sure I had learned absolutely everything there was to know about close elections.

Walter is just one of the many accomplished professionals here today. For more than 150 years, the Associated Press has been the brand name for spot news. Speaking at your annual meeting in 1906, Mark Twain said, "There are two forces that can carry light to all corners of the globe, and only two: The sun in the heavens and the Associated Press down here." That is still true today in newsrooms everywhere. Earlier generations of reporters hunched over teletypes waiting for AP stories. Today, they are in front of computer monitors waiting for the same thing, the latest from the Associated Press. And when they start writing, they go by AP news and AP style. That's a high tribute to an organization that has maintained very high standards over the years.

We meet at the hundred-day mark of a new administration, one I have been very proud to be a part of. The Oval Office is the final point of decision in our government, and the President has shown himself to be the kind of person you want to have sitting there. He is a man of conviction and discipline who, in a very short time, has managed to change the tone of discourse in Washington. He knows how to put a strong executive team in place, and he's done so. And he has not hesitated to take on issues that have not been seriously addressed for many years. One of those issues will be my topic this afternoon. When I finish, I will be happy to take a few questions.

During our campaign, President Bush and I spoke of energy as a storm cloud forming over the horizon that could affect the economy. America's reliance on energy and fossil fuels in particular has lately taken on an urgency not felt since the 1970s. A few years ago, many people had never heard the term "rolling blackout." Now everybody in California knows the term all too well. And the rest of America is starting to wonder when these rolling blackouts might roll over them. It is only reasonable for Americans to ask if California is, once again, foretelling the national trend.

Throughout the country, we have seen sharp increases in fuel prices from home heating oil to gasoline, which has again soared over the past several weeks, hitting $2 a gallon in downtown Chicago. In parts of the Northeast, communities face the possibility of electricity shortages this summer. Energy costs, as a share of household expenses, have been rising and families are beginning to feel the pinch. So, too, are farms and factories which ordinarily would pass the cost along to consumers. Instead, some are simply curtailing production and laying off workers.

Such costs are hard to measure in an economy as great as ours, but they do add up. By one estimate, rising fuel prices have cost the economy at least 100 billion dollars in 1999 alone. The potential crisis we face is largely the result of short-sighted domestic policies or, as in recent years I think, no policy at all.

As a country, we have demanded more and more energy but we have not brought on-line the supplies needed to meet that demand. That is clearly the problem in California, where demand has grown five times faster than supply over the last five years. And without a clear, coherent energy strategy for the nation, all Americans could one day go through what Californians are experiencing now, or even worse. Such a strategy requires a hard look at the country's needs and what is required in supplies and infrastructure to meet the demand.

The situation has been years in the making and it will take years for us to overcome, but President Bush and I have begun to work. In January, he directed me to form a task force to recommend a new national energy strategy. We will present our report in a few weeks' time to the President and then to the public. You can expect a mix of new legislation and some executive action as well as private initiatives.

There will be many recommendations - some obvious; some more complicated - but they will all arise from three basic principles: First, our strategy will be comprehensive in approach and long-term in outlook. By "comprehensive," I mean just that; a realistic assessment of where we are, where we need to go, and what it will take to get there. By "long-term," I mean none of the usual quick-fixes which, in the field of energy, rarely fix anything. Price controls, tapping our strategic reserve, creating new federal agencies - if these were any solution, we would have resolved the problem a long time ago.

Some things about the future we cannot know. Years down the road, alternative fuels may become a great deal more plentiful than they are today. But we are not yet in any position to stake our economy and our way of life on that possibility. For now, we must take the facts as they are. Whatever our hopes for developing alternative sources and for conserving energy - and that's part of our plan - the reality is that fossil fuels provide virtually 100 percent of our transportation needs and an overwhelming share of our electricity requirements. For years down the road, this will continue to be true.

We know that in the next two decades, the country's demand for oil will grow by a third, yet we are producing less oil today - 39 percent less than we were in 1970. We make up the difference with imports, relying ever more on the good graces of foreign suppliers.

How dependent have we become? Well, think of this: During the Arab oil embargo in the 1970s, 36 percent of our oil came from abroad. Today, it's 56 percent and growing steadily. Given current trends, we expect it to be 64 percent less than two decades from now.

Here's what we know about natural gas. By 2020, our demand will increase by two-thirds. This is a plentiful, clean-burning fuel, and we're producing and using more of it than ever before. What we've not done is to build all the needed infrastructure to carry it from the source to the user. And then there's the energy we all take most for granted: electricity. We all speak of the new economy and its marvels, sometimes forgetting that it all runs on electric power. An overall demand for electric power is expected to rise by 43 percent over the next 20 years.

So this is where we are with demand for oil and gas and electricity. The options left to us are fairly limited and they're fairly clear. For the oil we need, unless we choose to accept our growing dependence on foreign suppliers and all that goes with that, we must increase domestic production from known sources. We must also increase our refining capacity to prevent the kind of bottlenecks that cause gasoline prices to spike in different parts of the country.

Frankly, today, the prices that everyone's concerned about are much more a function of inadequate refinery capacity than they are necessarily tied to the international price of crude. As matters stand, it's been about 20 years since a large refinery was built in the United States.

For the natural gas we need, we must lay more pipelines - at least 38,000 miles more main distribution pipelines over the course of the next 20 years - and additional lines on top of that to deliver gas at the local level, to bring natural gas into our homes and workplaces.

For the electricity we need, we must be ambitious as well. Transmission grids stand in need of repair and upgrading and expansion. The demand for electricity is vast, but it also varies from place to place and from season to season. An expanded grid system would allow us to meet demand as it arises, sending power where it's needed from where it's not. If we put these connections in place, we'll go a long way toward avoiding future blackouts.

But that will only work, of course, if we are generating enough power in the first place. Over the next 20 years, just meeting projected demand will require between 1,300 and 1,900 new power plants. The low estimate is 1,300 new plants; the high estimate, 1,900 new plants. That averages out to more than one new power plant per week every week for the next 20 years.

It is time to get moving, and here again we must take the facts as they are. Coal is still the most plentiful source of affordable energy in the country, and it is by far the primary source of electric power generation. This will be the case for many years to come. To try and tell ourselves otherwise is to deny reality. Coal is not the cleanest source of energy, and we must support efforts to improve clean coal technology to soften its impact on the environment.

All of that leads me to a second principle of our strategy, and that's good stewardship. We want to insist on protecting and enhancing the environment, showing consideration for the air, natural lands, and watersheds of our country. This will require overcoming what is for some a cherished myth: that energy production and the environment must always involve competing values.

We can explore for energy, we can produce energy and use it, and we can do so with a decent regard for the natural environment. Alaska is a good case in point. As President Ronald Reagan once said, "No one wants to treat this last American frontier as we treated the first." President Bush and I see it the same way, and so do most of the American people.

If we had to make do with the drilling technology of the past, then there would be a strong case against exploration in the Alaska wild. But oil drilling has changed enormously, especially in recent years.

Three-dimensional seismic now has given us much greater accuracy, improving the success rate and minimizing the occurrence of dry holes. In Prudhoe Bay, the vast majority of drilling over the past decade has been horizontal, allowing much oil production to go literally unnoticed in terms of the surface and habitat to remain undisturbed.

The same sensitivity and the same methods would be applied in the event we opened production in the Arctic National Wildlife Reserve. ANWR covers 19 million acres, an area roughly the size of South Carolina. The amount of land that would need to be disturbed on the surface by oil production would be about 2,000 acres. That is an area smaller than the size of Dulles Airport outside of Washington D.C.

The notion that somehow developing the resources at ANWR requires a vast despoiling of the environment is provenly false. This is one reason why the overwhelming majority of people who live in Alaska support developing the resource in their own state.

President Bush and I are Westerners. I grew up in Wyoming. My dad worked in the Soil Conservation Service. It's a region where stewardship is a serious matter. People rely on the land not only for the livelihood it yields but for the life it offers. You come to appreciate the wonders of creation all around you. The quickest way to lose respect in my part of the country is to act harshly or selfishly toward the natural world and its inhabitants. There is no excuse for that kind of reckless disregard of nature's claims. Our energy strategy will leave no room for it.

We can also safeguard the environment by making greater use of the cleanest methods of power generation that we know. We have, after all, mastered one form of technology that causes zero emissions of greenhouse gases: nuclear power. Fortunately for the environment, one-fifth, that is, 20 percent of our electricity today is generated by nuclear power plants. But the government has not granted a single new nuclear power permit in more than 20 years, and many existing plants are going to be shutting down. If we're serious about environmental protection, then we must seriously question the wisdom of backing away from what is, as a matter of record, a safe, clean, very plentiful energy source.

The same can be said of hydroelectric power. Nine percent of our electricity generated in the United States comes from dams. We must be mindful of the fish and the wildlife affected by man-made dams, and we can do that without placing unnecessary burdens on a very viable and safe source of energy.

Another part of our energy future is power from renewable sources; some known and others perhaps still to be discovered. There's been progress in the use of biomass, geothermal, wind, and solar energy. Twenty years from now, with continued advances in R and D, we might reasonably expect renewables to meet three times the share of energy needs they meet today. But that would still only be 6 percent of our total needs.

The third and final principle of our energy strategy is to make better use, through the latest technology, of what we take from the earth. I have already mentioned clean coal technology and alternative clean energy sources. But it's more than a matter of cleaner use; it's efficient use as well.

Here we aim to continue a path of uninterrupted progress in many fields. We have millions of fuel-efficient cars, where silicon chips effectively tune the engine between every firing of the sparkplug. The latest computer screens use a fraction of the power needed than older models. Low-power technology has been perfected for many portable and wireless devices. Everything from light bulbs to appliances to video equipment is far more energy efficient than ever before.

New technologies are proving that we can save energy without sacrificing our standard of living, and we're going to encourage it in every way possible. In doing all of these things, however, we must be clear about our purposes. The aim here is efficiency, not austerity.

We all remember the energy crisis of the 1970s, when people in positions of responsibility complained that Americans just used too much energy. Well, it is a good thing to conserve energy in our daily lives and we certainly want to do that, and probably all of us can think of ways to do so. We can certainly think of ways that other people can conserve energy. Therein lies the temptation for policy-makers, the impulse to begin telling Americans that we live too well and, to recall the '70s phrase, that we've got to do more with less. Already some groups are suggesting that government should step in to force Americans to consume less energy, as if we could simply conserve or ration our way out of the situation we're in.

Now, conservation is an important part of the total effort. But to speak exclusively of conservation is to duck the tough issues. Conservation may be a sign of personal virtue, but it is not a sufficient basis all by itself for sound, comprehensive energy policy. We also have to produce more. The American people have worked very hard to get where they are, and the hardest working are the least likely to go around squandering energy or anything else that costs money. Our strategy will recognize that the present crisis does not represent a failing of the American people.

America's energy challenges are serious but they are not perplexing. We know what needs to be done.

We have always had the ability, we still have the resources, and as of 100 days ago, I believe we have the leadership. Thank you very much.

DONALD E. NEWHOUSE: Mr. Vice-President, as Chairman, my job here at lunch is to ask questions that emerge from this alert, aware audience. So it is with a combination of respect and admiration that I put this first question to you: How do you feel?

VICE-PRESIDENT CHENEY: Well, I feel very good. I thought about jumping up and down and doing jumping jacks up here, but my wife yells at me when I act irreverent like that. No, health is a serious issue, obviously, in a senior official, and especially in my role. I think everybody knows the status of my health. I'm now the most prominent heart patient in America. That's not something that I planned on when I agreed to serve as the Vice-President. There's a legitimate curiosity and interest out there, and we've tried to fill that by making available a great deal of information about my circumstances.

I have been uniquely blessed. I have some great doctors. The technology is phenomenal these days for people with my problems. I have been able to live a full and active life, even though I have lived with coronary artery disease now for over two decades. My entire career in Congress, the Defense Department, and the private sector occurred after the onset of coronary artery disease, and now I'm privileged to serve as Vice-President. If I ever get to the point where my doctors believe that it's not wise or prudent for me to continue in this capacity, obviously I'd step aside. But as I say, I have got better medical care now than ever before. The doctor travels with me 24 hours a day; that's normal for a Vice-President, by the way.

I appreciate the interest, understand the interest, and say I can assure you that as long as I feel good, I'll keep doing the job. If I get to the point where I no longer can, you'll be the first to know, right after the President.

DONALD E. NEWHOUSE: Thank you. On day 101 of the Bush administration, what is the best thing that's been accomplished? What was the worst misstep of the first 100 days?

VICE-PRESIDENT CHENEY: Well, I think the most important step has been putting together the team. It's like anything else. Whether you run a newspaper or a business or organize an agency, getting good people on board, especially in the White House and the Cabinet, really sets the tone for everything that follows after that. If you get good people in those early weeks engaged, willing to give up their pursuits and come and join the government, that counts for a great deal and will be crucial in the years ahead in terms of how well we're able to function as a government. Probably the biggest problem - I don't think of it as a misstep so much as a difficulty we inherited just by circumstances - is the fact that we got started late because of the Florida recount. We got the Cabinet in place very fast, as cabinets go.

But the amount of time that was available for the Cabinet and for the rest of us to begin to fill in the sub-Cabinet, the under-secretaries and the assistant secretaries throughout the government, has really been a very serious problem. That whole process is slower than it's ever been before. I don't know what we could have done about it. We moved as rapidly as we could. But we couldn't really begin to recruit people until the recount period ended and there was no question about the outcome of the election, and of course that was halfway through what would be a normal transition. So if there is a problem out there today, I would say it's the fact that we've got less than 40 of our senior people confirmed that require Senate confirmation. The process has become more cumbersome than ever before.

DONALD E. NEWHOUSE: Mr. Vice-President, did Bill Clinton set up the Bush administration to take a political fall on the environment by issuing executive orders to take effect after he left office and the Republicans took over?

VICE-PRESIDENT CHENEY: Well, I guess I haven't characterized it in those terms. I'm tempted. There was an amazing amount of activity in those closing hours of the Clinton administration.

Just a little anecdote. The traditional practice is for the incoming President and Vice-President to go to church that morning before you go to the White House. President Bush and I and our families, we went to St. John's, a little church there right across from the White House, for a very special church service. Then we got in our cars outside, in the motorcade, to drive around to the White House and we were held for 15 or 20 minutes outside the church waiting because President Clinton wasn't yet ready to receive us. I don't know whether it's true or not, but the rumor was he was upstairs signing executive orders, among other things.

I think it's important to recognize these are vital issues that we're dealing with here. People care a great deal about health questions and environmental questions, and we do as an administration. We've also got an obligation, to the extent that we can, to see to it that going forward we have sound policy.

Frankly, I think there were some orders issued at the last minute; certainly, they all needed to be reviewed. If you had any doubts about whether or not there was a thousand percent quality in those last minute decisions, look at the pardons. Clearly, there were some judgments made that I think a lot of people think probably weren't up to the standard we'd like to see in the administration. We felt an obligation to review all of them. We've gone forward with some; others we've held pending further exploration of the science and an understanding of what the issues are that are involved.

I do think that the environment is one of those issues. It's very emotional for everybody. Hopefully going forward - certainly this is one of the elements that will affect the debate over energy policy - we can get everybody to sort of calm down, come down off the ceiling, and look realistically at the facts on both sides and make careful, considered judgments about these very important decisions.

Frankly, I guess the Democrats now are running an ad where they've got a little girl with a glass held out, asking for more arsenic in her water. Frankly, I think that's a bit of a cheap shot. The fact of the matter is, of course, that those standards are being evaluated. We will end up reducing the standard. The standard in the Bush administration will be below what it was for eight years in the Clinton administration.

DONALD E. NEWHOUSE: Mr. Vice-President, how close will President Bush get to his 1.6 trillion dollar ten-year tax cut? With the House at that figure and the Senate at 1.25 trillion, will they split the difference and will that satisfy the President?

VICE-PRESIDENT CHENEY: We will push for everything we can. The President has been -- the only reason there's a tax cut on the table is because of his determination to, first of all, make it an issue in the campaign. A lot of people told him to drop it when we came to town. After a very close election, others said, you're obviously going to have to back off your plans for a tax cut. He said, no, full speed ahead.

We're now to the point where we've passed it through both houses, the overall resolution, and we've now got to resolve the difference between House and Senate. I think we'll end up when we get through with something above the Senate level, and exactly where that will be is going to be a subject for negotiation from the Congress. But it will be the biggest tax cut package in our generation for the American taxpayer. We think it's the right thing to do, very important from the standpoint of going forward with respect to the economy, and I think a major success story for President Bush.

DONALD E. NEWHOUSE: Mr. Vice-President, to follow up, is the dollar amount of the tax cut as important to the White House as the way it is provided: across the board, as President Bush wants, or targeted to specific classes of taxpayers as the Democrats would have it?

VICE-PRESIDENT CHENEY: I think across the board is very important. At the heart of the overall package is basically a decision that says, look, if we leave the tax code where it is today, we're going to collect over the next ten years, our latest estimate, 5.6 trillion dollars in revenue that will be "surplus." We want to take a portion of that 1.6 trillion and not collect it, in effect leave it with the American taxpayer. It turns out that it's the folks at the upper income scale, the top 50 percent of income earners in the country pay 95 percent of the income tax; the top 5 percent pay about 50 percent of the income tax. If you're going to have the impact we want on the economy, across the board, we think, is the right way to go. We have ample opportunity to deal with so-called targeted efforts. The increase in the child credit, for example, from $500 to $1,000 dollars, very much going to affect families, especially folks at middle income levels. Getting rid of the marriage penalty.

These are all provisions that will help in reducing the top rate. Getting rid of the death tax, for example, is an important spur for small businesses. A lot of small businesses are Chapter S and pay that top rate. How we deal with those will have a big impact on the economy, and if we were to drop the notion of across the board, I think it would defeat the major purpose of the present tax cut.

DONALD E. NEWHOUSE: Mr. Vice-President, one last question and one we are duty-bound as inquiring journalists to ask: What is your nickname for the President?

VICE-PRESIDENT CHENEY: What's my nickname for the President? Well, in our White House, the President is the one who passes out nicknames. He does it very effectively and he has a great ability to sort of identify people's unique characteristics that stand out. He does it on a regular basis. It's always done in good humor, with no feelings hurt. When I talk to him, I always refer to him as Mr. President. I think that's important.

DONALD E. NEWHOUSE: And what does he refer to you as, Mr. Vice-President?

VICE-PRESIDENT CHENEY: He calls me "Veep."

DONALD E. NEWHOUSE: Thank you very much, Mr. Vice-President, for speaking to us.