CRUDE REALITY Bush orders probe of gas prices He orders more oil onto the open market, tells the EPA to ease clean-air rules - and says prices will likely still rise.

April 26, 2006|By Ron Hutcheson INQUIRER WASHINGTON BUREAU

WASHINGTON — Responding to growing public frustration over soaring gasoline prices, President Bush called yesterday for a nationwide investigation into possible price manipulation.

Even as he announced other steps intended to release gas supplies, Bush warned that prices were likely to climb. On Capitol Hill, members of Congress called for more drastic action, including a new tax on oil profits or the possible breakup of big oil companies.

"Enough is enough. We have no competition," said Sen. Charles E. Schumer (D., N.Y.), who hopes to spark a Senate debate on the structure of the oil industry.

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The finger-pointing and calls for action illuminated a sad truth for consumers: While gas prices have become a hot topic in Washington, no one has an easy solution, and none of the proposals suggested so far is going to bring prices down much or soon.

"Short term is tough," said David Sandalow, an energy expert at the Brookings Institution, a center-left policy-research center. "We're living now with the consequences of policy decisions that were made over the past several years - in some cases, over the past several decades. The core of the problem is skyrocketing demand in the United States and other countries, and instability among key suppliers."

Bush acknowledged that his proposals would make little difference in the short term, but he said, "Every little bit helps."

He directed the Energy Department to delay oil shipments this summer to the Strategic Petroleum Reserve, the government's fuel stockpile. That will leave more oil for the open market, but not much more. Administration officials said the change would free about 12 million barrels of oil over the summer, a drop in the bucket compared with the 20 million barrels that the nation consumes daily.

"It's more symbol than substance," Sandalow said.

Bush also directed the Environmental Protection Agency to ease air-quality rules that he said could lead to fuel shortages.

Some high-pollution areas require special fuel blends in summer to reduce gas emissions. But the annual changeover is more complicated this year because many refineries are using ethanol as a replacement for MTBE, a fuel additive that has been linked to water pollution. The increased demand for ethanol has raised concerns about possible shortages that could lead to even higher prices in some parts of the country.

Environmental groups and some energy analysts questioned the need for easing air-quality rules and said fears of shortages were overblown.

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