* Opposing agendas on gas prices
* Actions to have little chance of lowering prices
* High prices may push consumers to change driving habits
By Ayesha Rascoe and Timothy Gardner
WASHINGTON, May 2 With U.S. gasoline prices
surging to $4 a gallon, U.S. lawmakers will be scrambling this
week to assure voters they are working to ease their pain.
From the White House to Congress, politicians facing
election next year are eager to appear active on an issue that
could prove difficult to fix in the short run.
"The political pressure is very strong and the need to do
something is very strong, but I don't expect there are many
things they can do that will give immediate relief," said David
Pumphrey, of the Center for Strategic and International
Studies, who once worked at the Department of Energy.
Democrats, led by President Barack Obama, want to crack
down on big tax breaks for oil majors, especially after the
firms posted soaring first-quarter earnings last week.
"When oil companies are making huge profits and you're
struggling at the pump, and we're scouring the federal budget
for spending we can afford to do without, these tax giveaways
aren't right," Obama said in his radio address on Saturday.
Exxon Mobil (XOM.N), the world's most valuable traded
company, led the way posting a 69 percent rise in earnings to
$10.65 billion, trumping Wall street expectations.
Republicans want to throw open offshore and other areas to
more drilling to boost domestic production and cut dependence
on foreign oil.
There will be two votes in the Republican-led House of
Representatives on two measures that will speed up permitting
for offshore oil exploration and allow drilling off the
Virginia coast. [ID:nN1388727]
Republicans have blasted the Obama administration for
slowing the pace of granting permits for offshore oil
development and for halting a proposal to allow drilling off
the East Coast after last year's massive BP (BP.L) oil spill.
They argue those moves have left the United States more
vulnerable to oil price shocks and more dependent on foreign
sources for fuel.
ENDING TAX BREAKS FOR BIG OIL
With rising fuel prices cutting into Obama's poll numbers
as he starts his 2012 election bid, the White House seized on
comments from Republican House Speaker John Boehner that seemed
to open the door to cutting tax breaks for oil companies.
Boehner backtracked quickly when the White House pressed
for action, and he said ending the tax breaks them would only
lead to higher gasoline prices. [ID:nN26281823]
The White House has pushed ahead with its appeal to end the
tax breaks, saying the funds could be diverted to cut the
deficit and to invest in renewable energy. [ID:nN28278233]
Senate Majority Leader Harry Reid said last week he would
move quickly to bring the tax legislation to the floor for a
vote, but the bill's timing is unclear.
Even if it loses in the Republican-controlled House, the
campaign to end tax breaks could embarrass Republicans who
could be seen as siding with Big Oil during a big spike in
gasoline prices -- votes the Democrats could use to their
advantage in debates before the November 2012 election.
HIGH PRICES CURE FOR HIGH PRICES
All of the measures will likely have little impact on
gasoline prices, which hit $3.88 last week as unrest in the
Middle East and weak dollar pushed oil to more than $112 a
barrel, analysts said.
"From the point of view of immediate gasoline prices,
nothing that anybody is talking about makes any sense," said
Amy Myers Jaffe, of the Baker Institute at Rice University.
"Taxing the oil industry isn't going to lower gasoline
prices. Doing something about drilling even now is not going to
lower gasoline prices now," Jaffe said.
Ironically, high gasoline prices will likely do more to
lower fuel costs than any congressional action, said commodity
analyst Matt Smith, at Summit Energy.
"Perhaps high prices are the ultimate remedy for high
prices," Smith said, saying high prices will lead to either
less driving and more fuel-efficient vehicles, or consumers
will spend less in other areas to maintain driving habits.
"Both situations will likely lead to lower gasoline prices
... but the pain at the pump has to be felt first,
unfortunately," Smith said.
(Editing by Russell Blinch and Peter Cooney)