Democrats call for new energy laws

04/27/2006

WASHINGTON (CNN)—As the debate over what to do about high gas prices continued on Capitol Hill, Democrats on Wednesday called for a new energy bill and federal legislation to punish price gougers.

“There’s no reason why we can’t put forth a real energy policy that addresses the needs of this nation,” said Rep. Bart Stupak, a member of the House Energy and Commerce Committee, “from gouging to market manipulation to biofuels. We can do it.”

Jim Clyburn, a representative from South Carolina, welcomed President Bush’s call for investigations into possible price gouging but put the blame for high prices on the White House.

“All he has to do is take a short trip to the nearest mirror, and he will see what the problem with the prices at the pump,” Clyburn said.

Clyburn said Democrats would unveil their energy plan “within the next three weeks.”

On Tuesday, President Bush called the oil issue a matter of national security and temporarily stopped deposits to the U.S. Strategic Petroleum Reserve. (Full story)

Bush is delaying this summer’s deposits to the reserve—an emergency stockpile of government-owned crude oil—as he faces anger from consumers who will vote this fall in mid-term elections.

“So by deferring deposits until the fall, we’ll leave a little more oil on the market,” Bush said during a speech in Washington at the Renewable Fuels Association, a trade group for the ethanol industry. “Every little bit helps.” (Watch Bush tout his plan to cut gasoline prices—3:29)

“Our addiction to oil is a matter of national security concern,” Bush said.

However, oil experts said the impact of withholding deposits, while positive, will have a negligible impact on gas prices.

“It’s less than 30,000 barrels a day in a country that consumes 21 million. That’s not even rearranging a single deck chair on the Titanic,” said Peter Beutel, president of the energy risk management firm Cameron Hanover. “But psychologically, it has some effect.” (CNNMoney: Bush seeks to curb oil tax breaks)

In outlining the other parts of his energy plan, Bush said the United States should “follow suit on what we have been emphasizing, particularly through the energy bill, and that is to encourage conservation, to expand domestic production and to develop alternative sources of energy like ethanol,” Bush said.

On Wednesday, Democratic Rep. Stephanie Herseth of South Dakota said the administration had underfunded development of alternative fuels like ethanol and biodiesel.

“They have stifled those opportunities at the behest of the large oil companies,” she said. “I’m pleased that the president made the speech he made yesterday, but words alone aren’t enough to solve this problem.”

Bush also has ordered a federal investigation into possible cheating, price gouging or illegal manipulation in the gasoline markets.

Bush said consumers must first be treated fairly at the gas pump.

“Americans understand by and large that the price of crude oil is going up and that [gas] prices are going up, but what they don’t want and will not accept is manipulation of the market,” Bush said. “And neither will I.”

U.S. Attorney General Alberto Gonzales and the Federal Trade Commission sent a letter Tuesday to all 50 state attorneys general, outgoing White House spokesman Scott McClellan said, who have primary authority over price gouging issues. The letter asks them to monitor the issue, he said, and offers federal help.

The letter asks officials to vigorously enforce state law “against any anticompetitive, anticonsumer conduct in the petroleum industry,” the AP reported.

Bush also called for a rollback of $2 billion in government assistance and tax breaks for oil companies over the next 10 years for items such as research and development for deep-water drilling. (An explainer on why gas prices are soaring)

On Wednesday, House Minority Leader Nancy Pelosi of California said Democrats want to rollback $5 billion in tax breaks for oil companies.

“Record oil prices and large cash flows also mean that Congress has got to understand that these energy companies don’t need unnecessary tax breaks like the write-offs of certain geological and geophysical expenditures or the use of taxpayers’ monies to subsidize energy companies’ research into deep-water drilling,” Bush said.

Oil companies reported record profits in 2005, led by Exxon Mobil, which said it made $36.1 billion—the largest-ever annual profit for a U.S. firm.

As the nation’s busiest driving season approaches, American consumers are paying a national average of $2.91 per gallon for regular self-serve, according to the Lundberg Survey of 7,000 gasoline stations this month. (Watch why some pumps shut down as prices go up—2:51)