- The Washington Times - Wednesday, June 21, 2000

Republican leaders attacked the Clinton administration yesterday for not acting against record gas prices even as Energy Secretary Bill Richardson sought to cajole foreign oil producers into alleviating the problem at their meeting today.

Senate Majority Leader Trent Lott accused the Energy secretary of being "asleep at the switch" and because of other problems at the Department of Energy ranging from stolen nuclear secrets to lost computer files stopped just short of calling for his resignation.

"We don't have a national energy policy, gasoline prices are up and probably going up even more; and the administration appears to have no answer for it, other than to go to the OPEC countries with a tin cup and ask for help," said the Mississippi Republican.

Meanwhile, congressional Democrats said the Federal Trade Commission has opened a formal investigation into oil-company collusion and price gouging in the Midwest, where gas prices have spiked.

House Speaker J. Dennis Hastert repeated his demand that Environmental Protection Agency Administrator Carol M. Browner immediately change or suspend clean-fuel regulations that he says have caused the particularly big jump in Midwestern cities, especially Chicago and Milwaukee.

"Working families are bearing the brunt of EPA's inaction," said the Illinois Republican, contending that the EPA could prompt an immediate 15-cent reduction in gas prices in the hard-hit Midwest by giving Illinois and Wisconsin the credit they have requested for using cleaner-burning ethanol in their fuel.

His argument was bolstered by a report from the Congressional Research Service released yesterday that found that EPA's clean-fuel regulations are at least partly responsible for gas prices ranging up to $2.50 a gallon in the Midwest.

Republicans were adamant in blaming the White House, particularly because administration officials from President Clinton on down have laid the blame for high gas prices on price gouging by oil companies, without producing evidence. Mr. Clinton has begun several agency investigations into the allegations.

In its probe, the FTC will begin issuing subpoenas to oil companies by the end of the week, congressional Democrats said yesterday.

"The fact that they're moving forward with this investigation will be a clear signal to the oil companies to bring down prices immediately," said Sen. Richard J. Durbin, Illinois Democrat, one of several legislators who met with FTC Chairman Robert Pitofsky on Capitol Hill yesterday.

Responding to soaring gas prices yesterday, Democratic Gov. Frank L. O'Bannon yesterday suspended Indiana's sales tax on gas for up to 60 days, a move that could save motorists between 7 and 10 cents per gallon, the Associated Press reported.

House Republican Conference Chairman J.C. Watts Jr. noted that the White House assured the public in March that gas prices had peaked and would drop as much as 11 cents by summer's end.

"Today marks the first day of summer and prices are on the rise," the Oklahoma Republican said in a letter to Mr. Clinton. "Is it still the administration's view that gas prices will drop over the course of this summer?"

Pete Jeffries, Mr. Hastert's communications director, said continued inaction will have political consequences, particularly for the presidential aspirations of Vice President Al Gore.

"Gore should supervise the EPA administrator," he said. But he added that Mr. Gore has not always opposed higher gas prices. In his book, "Earth in the Balance," Mr. Gore advocated higher gas prices to encourage energy conservation. As recently as 1993, he said a broad-based energy tax would be good for the environment.

Their charges came as Mr. Richardson waged what he described as a "low-key effort" to get OPEC, which produces 40 percent of the world's oil, to "keep an open mind" about increasing output at its meeting today in Vienna, Austria.

Analysts expect OPEC to approve an increase of between 500,000 and 1 million barrels a day in production of about 25 million barrels a day.

Mr. Richardson's low-profile approach contrasts sharply with the high-profile international lobbying campaign for production increases he waged in March.

But while he is talking softly this time, the Energy Department brandished a big stick last week when it tapped into the nation's Strategic Petroleum Reserve to avert disruptions at two Louisiana refineries that feed gas to the East Coast. That move helped reduce oil prices, at least temporarily.

Analysts give Mr. Richardson credit for taking a more diplomatic approach, saying the move could be working. As oil ministers gathered yesterday, they hinted that they already have agreed on a plan to increase supplies.

Even the oil minister of Iran, the most anti-American member of OPEC, told reporters that he has agreed to a "common position" with Saudi Arabia, the most pro-American member.

The Saudis have been pushing for an increase of 1 million barrels a day the amount that the U.S. Energy Information Administration says is needed to address the "precarious position" of world oil inventory levels and ease tight supplies in the United States.

Short of a move by OPEC to turn up the tap full force which few analysts expect the only source of immediate relief for the Midwest would be an EPA waiver from the clean-air regulations, said Ron Gold of PIRA Energy Group in New York.

"You always need some safety valve for these kinds of things," he said. "I wouldn't want to be Al Gore in Chicago saying how wonderful things are with the economy right now."

"It's a political problem. Americans hate high prices for gasoline" and think they have "a constitutional right" to cheap fuel, said Jay Saunders, oil analyst with Deutsche Bank Alex. Brown.

But he gave Mr. Richardson credit for "toning down his persuasion this time," especially because the Saudis are vulnerable if hard-line states believe they are caving in to U.S. pressure.

"They don't want to appear to be bowing to the 'Great Satan,' especially in front of Iran," he said.

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