April 27, 2006
Thursday

WASHINGTON - President Bush and lawmakers from both parties vied with one another Tuesday to demonstrate their concern over escalating gasoline prices in a barrage of speeches, news conferences and bill introductions.

In a move aimed at boosting gas supplies and loosening tight markets that have driven retail prices upward, Bush ordered a temporary freeze on oil companies' deposits into the Strategic Petroleum Reserve and granted a 20-day waiver of clean-air regulations for refineries.

Bush also urged oil companies to reinvest their record profits - which he called "large cash flows" - into expanding refining capacity and developing alternative energy sources.

Bush directed the Justice Department to work with the 50 states' attorneys general to probe possible gasoline price-gouging, and he again called on Congress to allow oil drilling in the Arctic National Wildlife Refuge.

"We owe it to the American people to be aggressive on price gouging now," Bush told members of the Renewable Fuels Association at a Washington hotel. "We owe it to the American people to be promoting alternative ways to drive their cars so as to make us less dependent on foreign sources of oil. We owe it to the American people to be aggressive in the use of technology so we can diversify away from the hydrocarbon society."

Bush, though, rejected more drastic measures proposed by some Democratic lawmakers, such as imposing price controls or levying "windfall profits" taxes on oil companies.

"Those plans haven't worked in the past," Bush said.

As Bush's motorcade carried him and reporters to the hotel, it passed an Exxon station selling gas at almost $3.30 a gallon. The average nationwide price reached $2.96, and industry analysts predicted that prices would remain high through the summer driving season.

Even Bush's aides acknowledged that his proposals are unlikely to provide short-term relief to American drivers.

"This is something that has been building for decades," said White House press secretary Scott McClellan. "It's not something that we got into overnight, it's not something we're going to get out of overnight. But the president is concerned - particularly with the summer travel season coming up - about rising gas prices."

Despite the hit at the pump, the U.S. consumer confidence index has risen by 2.1 points in April, reaching its highest level in almost four years.

Bush delivered a long paean to ethanol, extolling its environment-friendly qualities and ability to be produced in the United States.

"It's amazing, isn't it?" he said. "Without much cost, your automobile can be converted to be able to burn fuel with 85 percent ethanol, or a product made from corn grown right here in America."

Noting that increased ethanol production will help farmers and boost rural economies, Bush said sugarcane can also be used to make ethanol. He said he has proposed $150 million for research and development of other sources of ethanol, such as cellulose ethanol made from wood chips or switch grass.

"You don't have to choose between good environment and good economics," Bush said. "You can have both by the use of technology. And ethanol is an example of what I'm talking about."

Thanks in part to an energy bill Congress passed last year, which included incentives to increased ethanol production, Bush said the industry is booming.

"Last year, America used a record 4 billion gallons of ethanol," he said. "There are now 97 ethanol refineries in our country, and nine of those are expanding. And 35 more are under construction. The ethanol industry is on the move, and America is better off for it."

More than two-thirds of Americans said the high gas prices have caused a severe or moderate financial hardship for their households, according to a CNN/USA Today/Gallup poll.

Bush's proposals, a day after GOP congressional leaders urged him to order a probe of possible gasoline price-gouging, reflect Republican lawmakers' concerns entering re-election campaigns already burdened by an unpopular war and several criminal prosecutions of people with close ties to the party.

"Few things are less becoming in a political party than desperation, as Republicans are now demonstrating as they panic over rising oil and gas prices," the normally conservative Wall Street Journal said Tuesday in its lead editorial. "If blaming private industry for Congress' own energy mistakes is the best the GOP can do, no wonder its voters may sit out the November election."

Democrats, though, also scrambled to get ahead of the energy curve.

Sen. Robert Menendez, a New Jersey Democrat, announced plans to introduce legislation suspending the federal gas tax - now more than 18 cents a gallon - for 60 days. He planned to offer it as an amendment to a bill, pending before the Senate, providing emergency funding for the Iraq war.

In a letter to Bush, Sen. Harry Reid of Nevada, the Senate Democratic leader, and Sen. Dick Durbin of Illinois said Americans "are suffering while the oil companies are reporting record-breaking profits and multimillion-dollar retirement packages."

Reid and Durbin called on Bush to support legislation making energy price-gouging a federal crime, requiring the manufacture of more alternative-fuel cars and the production of more alternative fuels.

Democratic senators, including Dianne Feinstein of California and Maria Cantwell of Washington state, introduced a bill to improve the government's ability to investigate price-gouging or supply hoarding in oil, gas and electricity markets.

While New York stock exchange traders are required to maintain a paper audit trail, Feinstein said, energy traders have looser requirements.

"Manipulation and fraud are more difficult to discover," she said. "In essence, the federal government is blind."

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