Bush Eases Environmental Rules on Gasoline

By NEDRA PICKLER, Associated Press Writer

WASHINGTON - Under election-year pressure to reduce surging gasoline prices, President Bush on Tuesday halted filling of the nation's emergency oil reserve, urged the waiver of clean air rules to ease local gas shortages and called for the repeal of $2 billion in tax breaks for profit-heavy oil companies.

Still, experts said Bush's actions wouldn't have much impact on prices at the pump. The president warned that motorists would have to dig deep into their pockets all summer long.

Bush urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles, a politically popular measure that's also supported by environmentalists. He also directed the Environmental Protection Agency to use its authority to temporarily waive air quality laws in states if that would relieve a local gasoline supply shortage.

The White House was unable to say how much Bush's actions could affect the price of gas.

Bush said, "Every little bit helps."

Wholesale gasoline futures prices for June delivery dropped 8 cents a gallon to $2.10 on the New York Mercantile Exchange right after Bush's remarks. May gasoline futures settled at $2.1291 a gallon, a decline of 4.48 cents.

Democrats, eager to blame Republicans for high gas costs ahead of the November congressional elections, said Bush has had five years to find a way to lower prices and has favored big oil companies over consumers.

"It's crystal clear that the current spike in gas prices is at least partly due to an act of greed," said Sen. Bob Menendez, D-N.J., who proposed a 60-day suspension of the federal gas tax. "Greed that has been enabled, abetted — even encouraged, I would say — by this administration."

The country's three largest oil and gas companies were expected to report combined first-quarter profits later in the week in excess of $16 billion, a 19 percent surge from last year. Bush, a former oilman, asked his administration to investigate possible price gouging and said Congress should revoke about $2 billion in tax breaks that Congress approved and he signed into law to encourage exploration.

"Cash flows are up," Bush said. "Taxpayers don't need to be paying for certain of these expenses on behalf of the energy companies."

Menendez spoke at a press conference where Democrats sought to turn gas prices — like Hurricane Katrina and the Iraq war — into an issue to undermine Bush's standing with voters. "What happened to Iraq oil, Mr. President? You said Iraqi oil would pay for the war. Ain't seen no money. Ain't seen no oil," said Sen. Barbara Mikulski (news, bio, voting record) of Maryland.

The suspension of oil purchases for the federal emergency oil reserve until the fall is likely to have only a modest impact. The halt in deposits involves only 12 million barrels — less than the 20 million barrels of oil used every day in the United States for transportation.

Bush resisted calls for a suspension of shipments to the reserve in the past. When his 2004 presidential opponent, Sen. John Kerry, D-Mass., suggested the same idea during the campaign, Bush called it "playing politics."

On Tuesday, Bush said the nation's 685-million barrel petroleum reserve had enough fuel to guard against any major supply disruption over the next few months.

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 such as ethanol.

David Friedman of the Union of Concerned Scientists said an even more effective move would be to require that vehicles sold in the United States get higher gas mileage.

"The fundamental problem is that the fuel economy of cars and trucks is a disgrace and the world is just consuming too much oil and gasoline," Friedman said.

The EPA said it will consider fuel waivers on a case-by-case basis if gasoline supply problems become apparent, which could result in price spikes or shortages of cleaner summer-blend gasoline.

EPA spokesman John Millett said the waivers would not adversely impact air quality because they are only for 20 days, although states can request extensions.

Refiners, meanwhile, said that most of the change to summer-blend gasoline already has been completed and waivers may not be needed — and might even be counterproductive in some cases.

"You're going to have to be careful that you're not upsetting a plan that already is in the last stage of implementation," said Bob Slaughter, president of National Petrochemical Refiners Association.