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U.S. News

Bush sees no quick fix for high gasoline prices

WASHINGTON (Reuters) - President George W. Bush said on Tuesday there was no quick fix to lowering record fuel prices and that oil in the U.S. Strategic Petroleum Reserve should be saved for supply emergencies.

President George W. Bush holds a news conference in the briefing room of the White House in Washington July 15, 2008. REUTERS/Kevin Lamarque

“The SPR is for emergencies,” Bush told reporters at a White House news conference. He said “there is no immediate fix” to lowering record-high fuel prices.

Several U.S. lawmakers called on the White House this week to release some of the 706 million barrels of crude held in the reserve in order to put more supplies on the market and help lower oil and gasoline prices.

“Four-dollar gasoline, bogged down in a war in Iraq, the economy entering a recession, the stock market down more than 15 percent since January, the housing market in crisis, banks failing, the highest inflation in almost 30 years, and he still doesn’t think we’re in an emergency?” asked Democratic Rep. Edward Markey, who wants the president to release 500,000 barrels of oil a day from the reserve for six months.

Senate Majority Leader Harry Reid told reporters on Capitol Hill he would consider legislation requiring the administration to release oil supplies from the stockpile.

“Well, I would like to do that, yes, just like we did to tell him to stop putting it in,” said Reid, referring to legislation passed by Congress in May that ordered the administration to end oil deliveries to the reserve.

Bush believes more production is the answer. He said if Congress passed legislation to boost U.S. oil output that would change the “psychology” in the energy market about concerns over future oil supplies, which in turn would lower prices.

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Bush on Monday lifted the White House’s almost two-decades-old executive order that banned oil drilling along most U.S. coastal states and called on Congress to end its separate drilling moratorium.

“I readily concede that (expanded offshore drilling) it’s not going to produce a barrel of oil tomorrow, but it is going to change the psychology that, you know, demand will constantly outstrip supply,” the president said.

Bush said that speculators are not to blame for higher oil prices and it is the market fundamentals of tight supplies and strong demand that are pushing up crude costs.

“The fundamentals are what’s really driving the long-term price of oil,” he said. “Demand for oil has increased and supply has not kept up with it.”

Congressional Democratic leaders accused Bush of pushing more drilling to help big oil companies, which already have millions of acres under government leases to search for oil.

The House of Representatives is expected to vote on a bill on Thursday that would require companies to search for oil diligently on their existing leases or turn them back in before they could obtain any new government leases.

House Speaker Nancy Pelosi said after Bush’s news conference that the president’s demand that Congress allow more offshore drilling was “a diversionary tactic” to take the spotlight off the bigger problems in the U.S. economy.

Earlier this year, Bush was criticized for not knowing about forecasts predicting U.S. consumers would suffer from $4 a gallon gasoline. The president said he was “aware of it now,” when asked about record pump prices.

Bush defended his administration’s lack of a national campaign from the White House to push a strong message that Americans should use less energy.

“It’s a little presumptuous on my part to dictate to consumers how they live their lives,” he said. “They’re smart enough to figure out whether they’re going to drive less or not.”

Government data shows that high pump prices and a weak economy have discouraged driving, with U.S. gasoline demand down 1.2 percent, or about 107,000 barrels a day less, during the first half of 2008 compared with same period last year.

Editing by Matthew Lewis

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