Rising fuel prices become a hot political issue in Texas

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Rising fuel prices becoming a hot political issue Voters want action, but short-term fixes few

03/17/2000

By Robert Dodge and David McLemore / The Dallas Morning News

The political heat over rising oil prices has reached the boiling point - and so have the tempers of auto owners, truckers and other consumers.

Geoff Lupton of San Antonio is one of those feeling frustrated and powerless. As the dollar figure climbed on a Texaco station pump on Interstate 10 one day this week, Mr. Lupton could only watch as his savings poured into the tank of his family minivan.

"The prices hit me just as I was able to put a little aside for the future," said Mr. Lupton, 46. "Rising gas prices means rising prices everywhere soon, since everything is trucked somewhere. And the little guy, like me, gets caught in the pinch."

Political leaders have few options for a short-term fix. But that has not kept the painful consequences of higher energy prices from becoming a hot political issue after years of strong economic growth and low oil prices.

For the second time this month, independent truckers protested in Washington, clogging the streets Thursday and drawing President Clinton out of the White House to comment. And the day before, Republican and Democratic House members staged dueling news conferences at an Exxon station on Capitol Hill where gas sold for as much as $1.80 a gallon.

"We've been working very hard on this now for several weeks and we hope to have some things to say about it over the next few weeks," said Mr. Clinton, adding that he was hoping for some relief from the oil-producing countries soon.

GOP criticism

But Republicans said that Mr. Clinton has not been working hard enough and that the relief is not coming fast enough. In a long-thriving economy, Republicans think rising energy prices could be the first pocketbook issue in years that will resonate with voters.

And it has arrived just in time for the 2000 political campaign.

Gov. George W. Bush, the apparent GOP nominee, accused the Clinton administration of not having an energy policy. He's called for more exploration in Alaska's Arctic region and has said Mr. Clinton should put pressure on oil-producing allies.

"These are countries with which we should have an enormous amount of capital," Mr. Bush said last weekend in Florida.

Mr. Bush also criticized Vice President Al Gore for his 1993 tie-breaking Senate vote that raised the federal gasoline tax 4.3 cents. But the governor has not endorsed congressional Republican proposals to repeal the tax increase, which helps fund highway and bridge construction in states including Texas. And for now, Republican leaders have backed off that proposal.

Mr. Gore, who has locked up the Democratic nomination, defends the gasoline tax increase, saying it was part of the budget deal that helped create the economic expansion. Mr. Gore contends that White House pressure on OPEC is the best option.

"We've got tough negotiations under way with OPEC countries," Mr. Gore said.

Many voters agree that policy-makers in Washington have been slow to react.

"The leadership should do something, but they're not," said Ramona Arias, who was filling up her Kia Sportage at a Texaco station on I-10 outside downtown San Antonio.

"They're sitting around, fighting about which party is to blame," she added. "But they can afford high gas prices. We can't. For the working people, each penny increase means a lot."

Prices for a broad range of fuels started to rise after the Organization of the Petroleum Exporting Countries decided in March 1999 to cut production. The OPEC countries have surprised analysts and stuck to their quotas and pushed up prices.

Growth and demand

Analysts said the production cutbacks come as improving global economic growth is causing demand to increase. Oil producers were hurt when prices fell in 1998 as energy demand wanned because of the Asian economic crisis.

"The oil exporters underestimated the impact of the Asian economic crisis. And they also have underestimated the strength of the recovery," said Daniel Yergin, chairman of Cambridge Energy Associates. "This whole drama being played out at the gasoline pump today started two years ago."

And now, auto-loving Texans are finding it costs up to $50 to fill up their sport-utility vehicles and trucks. Truckers and farmers also are finding it more expensive to get food and other products to market. And airline executives contend they will have to raise air fares to pay for more costly jet fuel.

Nationwide, the average price of a gallon of gasoline has surged 59 percent to $1.54 in the last 12 months. In Texas, the cost of regular self-service gasoline has climbed to nearly $1.50, up from just 89 cents a year ago.

And some analysts believe gasoline could top $2 a gallon before the summer driving season begins.

For some younger consumers, higher gasoline prices could mean curtailing spring break vacation plans. "All I know is I'd like to go on a vacation somewhere outside Texas," said Forrest Halyard, 19, of Fort Worth, who was getting gas at a San Antonio-area Exxon station.

For others, higher prices mean a more expensive commute to work. Richard Villareal, 47, of Whitewright said he is spending $50 to $60 a week commuting and would like to see the 4.3-cent tax increase repealed.

Dallas resident Mark Gammon, 44 - who says he drives about 3,000 miles a month - also supports repealing the gasoline tax. But he said people need to be conscious of how much fuel they use.

"We really should get people out of their gas guzzlers," he said as he filled his Japanese import with $1.45-a-gallon regular.

The price of no tax

Repealing the 1993 gas tax increase would eliminate $5 billion from federal highway funds, experts say.

And it might not mean that much for most consumers. For the commuter who drives 12,000 miles annually and gets 20 miles to the gallon, it would represent a savings of $26.

Some experts said long-term solutions to U.S. dependence on foreign oil are needed. But others said repealing the tax increase would give some short-term relief.

"Lower-income Americans and truck drivers really feel this in a tough, difficult way every day," said Angela Antonelli, director for economic policy at the Heritage Foundation.

Analysts predicted that the White House's pressure on OPEC would eventually work. They said countries such as Mexico and Saudi Arabia have strong economic ties to the United States and cannot afford to cause a recession here.

"The Saudis and the other OPEC members do not want to kill the goose that laid the golden egg," said Greg Valliere, managing director of the Schwab Washington Research Group.

Mrs. Arias is hoping that Mr. Valliere is right.

"If they can't get it back to a dollar a gallon, they could at least get it down to something more livable, like $1.20," she said. "What makes me mad is that this happens every summer. They act like we're stupid. We need to show them that we're not."

http://dallasnews.com/campaign/50095_OILPRICES17.html

-- Martin Thompson (mthom1927@aol.com), March 17, 2000

Answers

Great post. Much appreciated.

-- Uncle Fred (dogboy45@bigfoot.com), March 17, 2000.

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