Bush monitoring oil price hikes
WASHINGTON (AP) — President Bush on Tuesday used the Iraqi oil embargo to promote his stalled energy plan, but aides said he was not seriously considering more dramatic action such as gasoline tax cuts or the use of oil reserves to respond to price increases.
"We need to be less dependent on foreign sources of crude oil," Bush said at a Connecticut GOP fund-raiser. "It was made pretty clear the other day when Saddam Hussein stands up and announces he's going to try to organize the oil boycott."
The administration predicts that drilling in Alaska's Arctic National Wildlife Refuge could yield as much as 1.3 million barrels of oil a day, or 20 percent of the nation's domestic production. A bill approving the drilling is stalled in the Democratic-controlled Senate.
"You know my opinion about Saddam; the world's not going to follow him," said Bush, a former Texas oilman. "But it just goes to show how important it is to diversify our supply away from places like Iraq."
Secretary of State Colin Powell, trying to broker peace in the Middle East, also said there was no emergency and he was confident other nations would make up any shortfall due to Iraqi action.
The administration also is monitoring with some concern the situation in Venezuela, where a strike has nearly shut down one of the world's largest oil refineries, officials said.
They said a range of options are at Bush's disposal, from tapping oil reserves in the short-term to pressing Congress to allow drilling in Alaska. However, administration officials said none of those options would be considered seriously unless oil prices take a dramatic jump.
Gasoline prices, which have risen steadily since February, jumped more than 8 cents per gallon in the past two weeks. A dramatic increase could slow the economic recovery and cause voters to blame the White House, though it might help Bush's case for more drilling, according to senior Republicans and administration officials.
Iran and Libya have expressed sympathy for Iraq's call, but other oil-producing countries have publicly declared that they won't take part in any embargo. Signs of a possible Israeli withdrawal from Palestinian territories restored calm to world oil markets yesterday.
Bush advisers said the president would not be inclined to tap oil reserves or promote a reduction in gasoline taxes — two options he rejected or dismissed during the presidential campaign.
President Clinton tapped into the reserves during the 2000 campaign, a move that drew criticism from Bush's campaign because it was viewed as an attempt to boost then-Vice President Al Gore's prospects. At the time, Bush said reserves should not be drawn from unless there is an emergency — and an administration official said yesterday that seasonal price fluctuations are not normally considered emergencies.
As for the gas tax, Bush did not join Republican lawmakers who clamored for a reduction as gasoline prices rose during the presidential campaign. He said then and, aides said, believes now that the money is needed for roads and other infrastructure.
In an interview with the Wall Street Journal, the president did not rule out tapping the nation's strategic petroleum reserve or reducing gasoline taxes.
"We'll look at all options" if the Iraqi threat creates a problem, he said.
Democratic Senate Majority Leader Tom Daschle said Democrats may offer an amendment on ANWR drilling if Republicans don't, just to demonstrate that the proposal doesn't have the support of 60 senators needed to break a filibuster.
Daschle said Iraq's decision to cut off oil exports should prompt Congress and the administration to reconsider their opposition to compelling automakers to produce more fuel-efficient cars.
Sen. Larry Craig, an Idaho Republican, said Republicans could introduce an Alaska drilling amendment this week with the idea of not holding a vote on it until next week.
"There are people in our caucus who would prefer to not have to vote on it," Craig said, acknowledging that drilling supporters have only between 49 and 54 votes. "But it's important that we send a clear signal to the American people, that we took up the issue and dealt with it."