WASHINGTON — The nation’s anger over $4 gasoline is producing a lot of energy-related theatrics at the White House and in Congress. Republicans are demanding new drilling off the nation’s beaches. Democrats want to tax away oil companies’ profits.
But none of the proposals has much chance of becoming law, and motorists would feel little or no relief if they did.
President Bush today said families across the country are looking to Washington to help them cope with economically ravaging high gasoline costs. And he warned lawmakers that if they don’t do something before the July Fourth holiday “they will need to explain” to voters.
The president outlined what he believes should be done: Open offshore waters that have been off-limits to oil company drilling for 27 years, pump out some of the oil located in an Alaska wildlife refuge and expand the development of oil shale.
Motorists looking for relief shouldn’t hold their breath.
These actions “will take years to have their full impact,” Bush acknowledged. But he said over time they would take pressure off gas prices, by increasing production of domestic oil. In April the United States imported 13.2 million barrels of oil a day while producing about 5 million a day.
As he knew would happen, the president’s ideas were denounced by Democratic congressional leaders.
It’s an energy policy “literally written by the oil industry — give away more public resources,” declared House Speaker Nancy Pelosi of California.
“We cannot drill our way out of this problem,” added Senate Majority Leader Harry Reid of Nevada. “America has just 3 percent of the world’s oil reserve, but Americans use a quarter of its oil.”
The two Democratic leaders made it clear the Bush offshore proposal — championed by House and Senate Republicans — is going nowhere.
But neither is the Democrats’ answer to anger at the pump: Tax some of the “windfall” profits being made by the country’s five largest oil companies and for good measure take away some of the tax breaks they’ve been enjoying. The money would be used to promote alternative energy like wind, solar and biofuels, as well as energy conservation.
Republicans have shown their dislike for the oil-tax idea, maintaining it could raise fuel prices, and they blocked it from even being brought up for a thorough debate. Democrats couldn’t get the 60 votes needed to advance their plan. And Bush promised to veto it anyway.
Senate Republican leader Mitch McConnell of Kentucky said today he thought it important that Congress “show we’re fully engaged … and ready to help in any way we can” to respond to the high gasoline prices.
“Unfortunately that means the parties will have to come together on a solution,” he added.
That’s unlikely given that Republicans and Democrats both seem determined to play to the election-year grandstands.
Last month, Congress did pass legislation to stop diverting oil to the government’s emergency reserve, and Bush complied.
Oil and gasoline prices went up, not down.
A Democratic proposal aimed at reducing oil market speculation, including a requirement for traders to put up more collateral for oil purchases, appeared to have significant support and analysts said it could have some impact on oil prices.
But it was bundled with the politically divisive tax proposal, so it has gone nowhere.
Both Republicans and Democrats have gone for the politically dramatic, knowing their efforts are unlikely to produce any new laws or lower the prices people are paying for gasoline today — or even over the next few years.
Opening more offshore waters to oil development “would be of little or no help at all in the short term,” says Robert Ebel, an energy expert at the Center for Strategic and International Studies. “In the long run it would depend on how much you find offshore.”
The Interior Department estimates there could be 18 billion barrels of oil and 77 trillion cubic feet of natural gas beneath the 574 million acres of federal coastal water that have been off-limits to drilling since 1981.
But, says Ebel, nobody knows how much oil can be readily found, and even then it could take five to seven years to begin production. And there are certain to be legal challenges and confrontations.
The Republican proposal would leave it up to states to give the final say on oil development off their coasts. While Virginia has expressed some interest in exploring for natural gas in federal waters off its coast, no state has yet said it wants oil drilling in areas that are under the existing federal ban.
“It’s going to take years and not months before this would translate to supply coming into the market,” agrees energy consultant Jim Ritterbusch. “This is largely a political gesture.”
Three years ago, Bush said he wished he “could wave a magic wand” and lower gas prices. At the time, oil cost $52 a barrel and gasoline $2.24 a gallon.
“There’s no excuse for delay,” Bush declared today from the White House Rose Garden, urging Congress to act. Oil was selling for $132 a barrel and gasoline averaged $4.08 a gallon.
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