Also see below:     
Bush Eases Environmental Rules on Gasoline    [

    Oilman in Chief
    By Frank O'Donnell
    TomPaine.com

    Wednesday 26 April 2006

    You know President George W. Bush's ratings are in the toilet when he starts bashing oil companies in the name of protecting what he repeatedly called "our consumers," as he did yesterday.

    And you know the Party in Power - just back from getting an earful from angry constituents about rising gasoline prices - is shaking in its shoes at the prospect of tomorrow's (April 27) profit announcement by ExxonMobil.

    So the president did what a floundering politician does: he tried to change the subject.

    In this case, the president made the environment a scapegoat for rising gasoline prices. He suggested a false choice - lower prices at the pump, or dirtier air.

    It was ironic that the president made his gas-price speech before the Renewable Fuels Association, since the president was citing the association's main product, ethanol, as one of the many reasons that gasoline prices have gone up. Actually, most of the price of gasoline is determined by world crude oil prices, and the presidential saber rattling over Iran hasn't helped that. But it's unlikely the president will make a speech in Tehran anytime soon.

    Regarding clean air requirements, the president noted that some state officials are requesting temporary waivers of clean-gasoline standards as a means of reducing price pressure. (Pennsylvania requested a waiver earlier this week for gasoline sold in the Philadelphia area.)

    A short-term waiver isn't the worst possible outcome, as long as it is extremely limited. But health and environmental groups should and will protest any effort to make long-term weakening changes to gasoline standards.

    The real truth is that oil companies could have anticipated this problem and planned for it better. Instead, they are taking advantage of a situation they helped create.

    Compare the following presidential myths to the reality:

    Myth #1: Clean air standards must be relaxed.

    Bush:

    Under federal quality - air quality laws, some areas of the country are required to use fuel blend called reformulated gasoline. Now, as you well know, this year we're going - undergoing a rapid transition in the primary ingredient in reformulated gas - from MTBE to ethanol ...

    Yet state and local officials in some parts of our country worry about supply disruption for the short term. They worry about the sudden change from MTBE to ethanol - the ethanol producers won't be able to meet the demand. And that's causing the price of gasoline to go up some amount in their jurisdictions.

    And some have contacted us to determine whether or not they can ask the EPA to waive local fuel requirements on a temporary basis ... So I'm directing EPA Administrator Johnson to use all his available authority to grant waivers that would relieve critical fuel supply shortages. And I do that for the sake of our consumers.

    Reality:

    In last year's energy bill, Congress actually eliminated the requirement that cleaner reformulated gasoline contain MTBE or ethanol. MTBE makers - including ExxonMobil - decided to stop shipping its product after Congress refused to give them a deal absolving these big water polluters from product liability lawsuits. But the companies have known about that congressional decision for nearly a year. They could have arranged a smoother transition to new gasoline blends. But scarcity drives up prices - and oil profits.

    Myth #2: Environmental requirements have blocked oil companies from building new refineries.

    Bush:

    There has not been a new refinery built in America in 30 years.

    Reality:

    In declaring that part of the problem is that we haven't built new refineries in the US in decades, the president is being simply disingenuous. As he well knows from his days in the business, the big oil companies decided for economic reasons that it was more cost-effective to expand existing refineries than build new ones. In fact, they have managed those expansions to avoid a gasoline glut that could lead to lower prices.

    Myth #3: Some mythical entity has created "boutique fuels" around the nation.

    Bush:

    The number of boutique fuels has expanded rapidly over the years, and America now has an uncoordinated and overly complex set of fuel rules ... I want to simplify the process for the sake of our consumers.

    Reality:

    Some states have adopted specialized fuels - usually at the request of the oil industry, which has frequently argued in favor of such fuels instead of cleaner gasoline. The oil industry has frequently profited by this seeming confusion.

    In last year's energy bill, Congress limited the number of future blends. But the oil industry has not offered to return any of the associated profits to consumers.

    The president and Republican-led Congress could have seen the rising gas prices coming miles away. The time to worry about it was last year when they were writing the monster energy bill, loaded with subsidies to energy companies. That's when concrete steps could have been taken to wean America from its oil addiction. Instead, the president is exploiting the public's anxiety over gas prices to advance his own oil-driven energy agenda.

    Go to Original

    Bush Eases Environmental Rules on Gasoline
    By Nedra Pickler
    The Associated Press

    Wednesday 26 April 2006

    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 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.