(Associated Press) President Bush on Tuesday ordered a temporary suspension of environmental rules for gasoline, making it easier for refiners to meet demand and possibly dampen prices at the pump. He also halted for the summer the purchase of crude oil for the government’s emergency reserve. Bush also announced steps to ease environmental standards governing fuel grades.
Mystech: Once again the hero of the free world comes to the rescue when the American public starts squealing like a piglet at the prospect of $3/gallon gasoline. Meanwhile, Brazil approaches foreign oil independence through a combination of local resources, ethanol and conservation. :-(
The moves came as political pressure intensified on Bush to do something about gasoline prices that are expected to stay high throughout the summer.
Bush said the nation’s strategic petroleum reserve had enough fuel to guard against any major supply disruption over the next few months.
“So, by deferring deposits until the fall, we’ll leave a little more oil on the market. Every little bit helps,” he said.
Wholesale gasoline futures prices for June delivery dropped 8 cents a gallon to $2.10 on the New York Mercantile Exchange immediately upon Bush’s remarks.
Easing the environment rules will allow refiners greater flexibility in providing oil supplies since they will not have to use certain additives such as ethanol to meet clean air standards. The suspension of oil purchases for the federal emergency oil reserve is likely to have only modest impact since relative little extra oil will be involved.
The high cost at the pump has turned into a major political issue, with Democrats and Republicans blaming each other for a problem that is largely out of Congress’ control. Republicans are worried that voters paying more than $3 per gallon would punish the party in power. Democrats want to make that happen.
Bush said that high gasoline prices are like a hidden tax on consumers and businesses, although he said the nation’s economy was strong. He urged Congress to take back some of the billions of dollars in tax incentives it gave energy companies, saying that with record profits, they don’t need the breaks. He urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles.
The president said Democrats in the past have urged higher taxes on fuel and price caps to control fuel expenses, but he said neither approach works. Instead, he called for increased conservation, an expansion of domestic production and increased use of alternative fuels like ethanol.
Bush said high energy prices are disturbing.
“Our addiction to oil is a matter of national security concerns,” the president said in a speech to the Renewable Fuels Association, which advocates alternate energy sources. “After all, today we get about 60 percent of our oil from foreign countries. That’s up from 20 years ago, where about 25 percent of our oil came from foreign countries.”
Bush said gasoline prices are expected to remain high throughout the summer and “that’s going to be a continued strain on the American people.”
Bush said the Federal Trade Commission, the Justice Department and the Energy Department were investigating whether the price of gasoline has been unfairly manipulated. The administration also contacted all 50 state attorneys general to offer technical assistance to urge them to investigate possible illegal price manipulation within their jurisdictions.