War Over Gas Prices Explodes

Posted April 29, 2008 at 6:33pm

With voters pinched and incensed by skyrocketing gas prices, both parties and President Bush ratcheted up the blame game Tuesday and scrambled to propose an ever-expanding list of possible salves.

Bush launched the first salvo, blasting Democrats for blocking measures to boost domestic oil supplies, including drilling in the Arctic National Wildlife Refuge, while Democrats responded that Republicans were protecting the mega-profits of oil companies at the expense of consumers and called for yet another investigation into rising prices.

Senate Environment and Public Works Chairman Barbara Boxer (D-Calif.) offered up numerous proposals for an upcoming Democratic bill on gas prices, ranging from selling off oil reserves to giving drivers tax rebates to banning oil exports.

Boxer called the continued purchase of oil for storage in the Strategic Petroleum Reserve at today’s high prices “an outrageous gift to the oil companies” and said the reserve should be filled when oil prices are low. Boxer suggested selling some of the reserves to try to lower prices, although President Bush explicitly rejected the idea by warning it would make the country more vulnerable should terrorists strike oil facilities.

Sen. Byron Dorgan (D-N.D.) said he had the veto-proof support of 67 Senators, including at least 16 Republicans, for legislation to stop filling the Strategic Petroleum Reserve. Dorgan’s proposal would halt purchases until prices drop below $75 a barrel or the end of the year, whichever comes first. Dorgan said he would try and attach his proposal to the FAA reauthorization bill on the Senate floor.

Boxer also backed the idea of tax rebates for drivers paid for by a windfall profits tax on oil companies. (A similar election-year proposal for a $100 driver tax rebate by then-Senate Majority Leader Bill Frist [R-Tenn.] went nowhere in 2006, when gas prices were much lower.) Boxer said that she wanted to make sure that oil companies did not pocket the proceeds from a gas tax holiday proposed by Sen. John McCain (R-Ariz.) and backed in part by Sen. Hillary Rodham Clinton (D-N.Y.) but opposed by Sen. Barack Obama (D-Ill.).

She added that she wanted to make sure that highway construction funds aren’t depleted as a result of the tax holiday. “We want to make sure that we don’t destroy jobs.”

While Democrats took aim at oil companies, Republicans simply took aim at Democrats.

Bush and Republicans renewed calls for opening up federal land to oil drilling, including ANWR and the Outer Continental Shelf, and adding new domestic oil refineries — all items that have been blocked by Democrats.

Sen. Ted Stevens (R-Alaska) trained his fire on the press. “How far does it have to go before you’ll join us?” he asked the press corps, accusing the press of backing environmental extremists. “Let us start drilling on federal lands. It doesn’t have to be ANWR, but that’s the best place. You all have convinced people that we don’t need domestic oil.”

Stevens, along with Sen. Kay Bailey Hutchison (R-Texas), endorsed the idea of suspending oil reserve purchases as a good temporary response. “It would take some of the pressure off,” he said, adding that a suspension of purchases should be an administration initiative instead of done legislatively.

Speaker Nancy Pelosi (D-Calif.) also repeated calls on the president to stop buying oil reserves — arguing that doing so could cut prices a nickel to 24 cents a gallon — and has urged Republicans to back a series of bills ranging from transferring oil company tax breaks to alternative energy sources and a bill aimed at fighting market manipulation. Pelosi also argued that opening up ANWR would do nothing for consumers today because it would take years to come on line.

Bush, however, said that suspending the purchase of about 67,000 to 68,000 barrels a day would not be enough to reduce prices in a world market of 85 million barrels a day.

“I don’t think that’s going to affect price when you affect one-tenth of 1 percent, and I do believe it is in our national interests to get the SPR filled in case there’s a major disruption of crude oil around the world,” Bush said.

Pelosi said the administration should investigate high gas prices. “In our energy bill last year, Congress gave the [Federal Trade Commission] the authority to probe possible market manipulation of gas prices, but to date, the commission has failed to exercise its power to protect consumers from skyrocketing energy costs. It must do so immediately.”

But Republicans said there was no mystery to rising prices — supply isn’t keeping up with rising demand.

“For years, Democrats got away with breathtaking hypocrisy: blasting Republicans for high gas prices while blocking sensible policies to increase our energy supply,” said Michael Steel, spokesman for House Minority Leader John Boehner (R-Ohio). “Now the problem they helped create is biting them in the backside.”