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What we want to do is make sure that there are adequate supplies of energy available at the lowest possible cost. Our economy is built on plentiful supplies of cheap energy. Then the question is, how do you get there? And if you believe in a market approach, you're most likely to get people to invest in whatever commodity it is you want to produce--in this case, energy. ... Generally the view has been in recent years--and I think it's a correct one--that having a market approach will attract the investment that's needed in order to produce enough; the law of supply and demand takes over, and that's how you get reasonable prices. The price has shot up in California, for example, because there has been no significant increase in supply in California for about 10 years, although there's been a 24 percent increase in the demand for electricity. So the key to reasonable prices, long term, is supply
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But why? ... Because we've had rapidly increasing demand for gas, and supply hasn't kept pace. Gas used to sell for a buck seventy-five or a buck eighty-five per thousand cubic feet, and now we've got $5, $6, $7. ... It's lower than that now, but it's still much higher than it's ever been on a sustained basis. Part of it is because moving forward, for example, with our expectations and future demand for electric power. Most of that capacity is expected to be fueled by gas.
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Also, they built adequate capacity, so they haven't got any problem. ... We've got significant excess capacity in Texas, with the result that you haven't had these kind of price spikes. In the end, a policy that doesn't reduce demand or increase supply is a Band-Aid. It doesn't solve the problem.
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The law of supply and demand works. Markets work. That's the backbone of our economy. The judgment's been made in many places around the country now over the last several years that we're going to let markets work in this area, just as we've done in telecommunications, for example
If we had a decent press, they would be asking Dick about this stuff, too.