- The Washington Times - Friday, April 28, 2006

President Bush yesterday rejected calls from Capitol Hill to levy a tax on oil-company profits and said there is “no evidence” of price gouging.

He urged the industry to increase oil exploration and to reinvest billions in earnings from high gasoline prices to build new refineries.

“I have no evidence that there is any rip-off taking place,” Mr. Bush said at a morning press conference in the White House Rose Garden. “But it’s the role of the Federal Trade Commission to assure me that my inclination and instinct is right.”

Mr. Bush said calls to tax the oil industry’s profits would take money that should be reinvested in refineries, pipeline construction for natural gas deliveries and exploration in “environmentally friendly ways.”

“Look, the temptation in Washington is to tax everything, and they spend the money — ‘they’ being the people in Washington,” said the president, who has called on Congress to strip away tax breaks the corporations are enjoying amid record profits.

Mr. Bush said gasoline prices topping $3 per gallon and the rising cost of oil — hovering above $70 a barrel, up from below $20 when the president took office in 2001 — were “a wake-up call.”

“We’re dependent on oil, and we need to get off oil,” he said. “And the American people have got to understand that we’re living in a global economy, and so when China and India demand more oil, it affects the price of gasoline at the pump. And, therefore, it’s important for us to diversify away from oil.”

He blamed oil companies, who this week announced profits in the tens of billions of dollars, for squeezing supply by failing to reinvest profits to ease demand. On Thursday, Exxon Mobil, the nation’s largest oil company, announced earnings climbed by 7 percent to $8.4 billion during the January-March period.

The president noted that no new refineries have been built since the 1970s, limiting the amount of crude oil that can be converted into gasoline, and has asked Congress to ease regulatory restrictions to allow oil companies to move swiftly.

“My attitude is that the oil companies need to be mindful that the American people expect them to reinvest their cash flows in such a way that it enhances our energy security,” Mr. Bush said.

In the press conference — which had been billed simply as a statement on the economy, Mr. Bush also:

• Rejected calls in Congress to abolish the Federal Emergency Management Agency. “The lessons of Katrina are important. We’ve learned a lot here at the federal level. We’re much more ready this time than we were the last time.”

• Criticized the Sudanese government’s thwarting of efforts by the United Nations and other international organizations to take a firmer control of fighting atrocities in the Darfur region. “My message to them is, we expect there to be full compliance with the international desire for there to be peace in the Darfur region.”

• Dodged a question about whether recent staff changes at the White House could help reverse his slump in the polls. “We’ve got big challenges for this country, and I’ve got a strategy to deal with them,” he said.

• Urged Iran to give up its ambitions to build nuclear weapons, saying “the world is united and concerned.”

Earlier this week, Mr. Bush ordered a temporary suspension of environmental rules for gasoline, which are creating bottlenecks in U.S. gasoline markets, and suspended new purchases of crude oil for putting in the U.S. Strategic Petroleum Reserve, a small move to boost market supplies.

Analysts and Democrats predict that the actions will do little to dampen high prices this summer, even though crude oil and gasoline futures fell after Mr. Bush’s announcement.

Motorists squeezed by high gas prices have begun to blame the Bush administration, according to some recent polls, about high gasoline profits. But others don’t.

Democrats strategists see the issue as a winner in the November election, and again yesterday criticized the president for what they called his inaction to stem rising prices.

On Thursday, Republican leaders proposed giving drivers a $100 tax rebate, opening up oil exploration in a small plot — the size of New York’s Central Park — in the vast Arctic National Wildlife Refuge, and tax relief and tax incentives to promote the use of hybrid cars.

Democrats, who mostly oppose drilling in the Arctic, quickly dismissed the Republican congressional package as the “same old, same old,” and said pump prices topping $3 per gallon will be the last straw and cost Republicans their congressional majority.

“High gas prices are going to be the final nail in the GOP coffin this election year,” said Sen. Charles E. Schumer of New York, who heads the Democratic Senatorial Campaign Committee.

This article is based in part on wire service reports.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide