President Bush on Tuesday tried to stanch rising gasoline prices by suspending deposits to the Strategic Petroleum Reserve and easing environmental regulations on reformulated fuels.
Although he is often accused by critics of kowtowing to the oil industry, Bush also called on Congress to strip the industry of $2 billion in tax breaks over the next decade and widened a federal probe into possible price-gouging by oil firms.
“We owe it to the American people to be aggressive on price gouging now,” Bush told an audience in Washington. “We owe it to the American people to be promoting alternative ways to drive their cars so as to make us less dependent on foreign sources of oil.”
On the way to and from the speech, the president’s motorcade passed an Exxon station near the Watergate hotel that was selling gasoline at prices ranging from $3.29 to $3.49 per gallon. The nationwide average was $2.91 for regular unleaded as of Tuesday.
In an effort to keep those prices in check, Bush directed the Energy Department to suspend deposits of crude oil into the Strategic Petroleum Reserve, a vast underground storage facility that the U.S. maintains in case of disruption to the nation’s oil supply. The deposits will resume in the fall.
“Our strategic reserve is sufficiently large enough to guard against any major supply disruption over the next few months,” Bush said. “So by deferring deposits until the fall, we’ll leave a little more oil on the market. Every little bit helps.”
He also suspended complicated environmental regulations that make it difficult for refiners to meet demand in the run-up to the summer driving season.
“Energy experts predict gas prices are going to remain high throughout the summer,” Bush acknowledged. “And that’s going to be a continued strain on the American people.”
Despite the president’s actions against the oil industry, Democrats continued to denounce his administration as a tool of Big Oil.
“This is an administration that is almost marinated in oil,” Sen. Ron Wyden, D-Ore., said on the Senate floor.
Sen. Charles Schumer, D-N.Y., called for a probe into “whether or not we should break up the big oil companies. Enough is enough.”
Bush, who once ran a small oil firm in Texas, noted that the industry is enjoying “large cash flows.”
“These energy companies don’t need unnecessary tax breaks,” he said. “I’m looking forward to Congress to take about $2 billion of these tax breaks out of the budget over a 10-year period.”
