http://washingtonpost.com/ac2/wp-dyn/A16835-2001May11?language=printer

Energy Crisis Solutions Years Away, Bush Says

By Mike Allen and Eric Pianin, Washington Post Staff Writers

Saturday, May 12, 2001; Page A01

President Bush declared yesterday that the nation faces an energy crisis that can be alleviated only by building more oil refineries, and said an across-the-board tax cut is about all the federal government can do to help people cope with this year's blackouts and rising gasoline prices.

Americans "have got to understand that this is a situation that's going to require some long-term planning," Bush said, adding that the causes of the energy shortages in California and rising gasoline prices at the pump have been "developing over the years and it's going to take a while to correct."

"I am deeply concerned about consumers, I am deeply concerned about high gas prices," Bush said during an afternoon news conference. "To anybody who wants to figure out how to help the consumers, pass the tax relief package as quickly as possible."

Bush's comments, which immediately drew protests from Democrats, followed criticism that he has done too little about the rolling blackouts in California and gas prices nationwide, which the Energy Department says will set a record this summer.

"Presidents, whether things are good or bad, get the blame," Bush said. "I understand that."

The president used the news conference to begin making the case for a national energy policy that he plans to release next week. He made it plain that the plan would focus on bolstering the country's energy supplies over the long term and would offer few solutions for consumers in the immediate future.

"There is no such thing as immediate supply," Bush said. "What this nation needs to do is to build more refining capacity. And we're prepared to work with the industry to encourage capital development, capital to be deployed to develop more refining capacity. And that may require us to analyze all regulations that discourage development."

Bush suggested he is open to considering a cut or temporary suspension of the federal gasoline tax of 18.4 cents a gallon. But his top aides continued to express reservations about the idea, and leaders in Congress said they are opposed to reducing the tax, a major source of money for federal highway construction.

Administration officials had criticized a cut in the gasoline tax as a quick fix that would make politicians feel good but could wind up hurting motorists by causing demand to rise, leading to still-higher prices. Even after Bush's comments, administration officials said there was no assurance that a gasoline tax cut would be passed on to consumers.

Bush did not point out any of his objections yesterday. "If anybody thinks they've got a good idea, I'll listen," he said. "But, for certain, what needs to happen is additional refining capacity, as well as tax relief."

Some Democrats attacked Bush's latest justification for his tax cut proposal as misguided and insensitive, and they said it underscored the administration's unwillingness to consider short-term steps to deal with rising gasoline prices and power blackouts in California.

"The president is becoming a one-trick pony," said House Minority Leader Richard A. Gephardt (D-Mo.). "A tax cut is the answer to every problem in front of us. It's an incredible argument to make that this should be the answer to the energy problem," he said.

Sen. Jeff Bingaman (D-N.M.), the ranking Democrat on the Energy and Natural Resources Committee, pointed out that whatever tax cut Congress passes "is not going to get money into people's pockets for some time." "And whatever tax cut we pass will not compensate most families for the enormous increase they're seeing in gas prices and prices for their home heating and electricity," he added.

The president on Thursday will unveil his energy task force's recommendations for boosting domestic energy supplies and reducing U.S. reliance on foreign oil. The report includes wide-ranging proposals for conservation and for increasing oil, gas, coal and nuclear energy production in coming decades.

With polls and media reports showing that consumers are increasingly anxious over their utility bills and prices at the gas pump, Democrats sense an important political advantage. Some Republican leaders are growing wary of a possible political backlash.

"I think you can only go for so long by saying that there are no short-term solutions," Rep. Roy Blunt (R-Mo.), the chief deputy House whip, said this week.

A senior Senate Republican adviser added that Republicans were beginning to bear the brunt of consumer frustrations with the oil and gas industry, which is enjoying record profits. "There are plenty of different ways to beat up on oil companies," the aide said. "If they don't modulate their behavior and understand how unpopular they've become, then congressional Republicans will have no choice but to react to preserve their viability in the political system."

The House this week began work on a Republican bill designed to increase the supply of electricity in California by easing clean air laws to keep power plants in service. However, an Energy and Commerce subcommittee that approved the measure rejected a proposal by Rep. Henry A. Waxman (D-Calif.) that would have imposed energy price caps.

Bingaman and other congressional Democrats have proposed a number of short-term measures for dealing with the current problems, ranging from the president "jawboning" oil and gas company executives to persuade them to reduce their prices, to developing a more streamlined system of regulating gasoline blends throughout the country, to requiring vehicles in the federal fleet to use cheaper alternative fuels when possible.

Senate Minority Leader Thomas A. Daschle (D-S.D.) and Sen. Byron L. Dorgan (D-N.D.) called for a special House-Senate investigation into high energy prices to determine whether oil companies have been engaging in price gouging.Senate Majority Leader Trent Lott (R-Miss.) and House Majority Leader Richard K. Armey (R-Tex.) dismissed the proposal as political posturing, but the Democrats warned that Bush and the Republicans would be blamed if nothing is done this summer.

"I think if this administration ignores this issue it does so at its own peril," Dorgan said.

© 2001 The Washington Post Company

-- Swissrose (cellier3@mindspring.com), May 12, 2001