Bush, Big Oil, Slammed On Pump Prices

Sen. Charles Schumer, D-N.Y., left, accompanied by other members of Congress, gestures during a Capitol Hill news conference, Tuesday, April 25, 2006 to discuss U. S. ports security and rising gas prices. From left are Schumer, Rep. Jerrold Nadler, D-N.Y., Rep. Edward Markey , D-Mass., Sen. Frank Lautenberg, D-N.J., and Sen. Hillary Rodham Clinton, D-N.Y.
As President Bush relaxed clean-fuel standards and ordered a temporary halt Tuesday to deposits to the nation's strategic petroleum reserve — ostensibly making more oil available for consumer needs and relieving pressure on pump prices — Democrats are blasting the administration's response to high gas prices.

Senator Chuck Schumer, D-N.Y., said big oil companies are the culprits behind runaway gas prices which he says go "way beyond what supply and demand would merit."

He said Mr. Bush refuses to "get tough on big oil."

Also Tuesday, crude oil and gasoline futures fell after Mr. Bush gave the Environmental Protection Agency the authority to relax regional clean-fuel standards to attract more imports of gasoline to the United States and to make it easier for supplies to be moved from one state to another.

But in an interview with CBS News, New York Attorney General Eliot Spitzer said acting only after prices skyrocket at the pumps shows a lack of preparation and insight by the administration.

With daily global demand roughly 85 million barrels per day, the world's oil producers have less than 2 million barrels per day of spare production capacity. So amidst a tight global market, both tensions with oil-rich nations and increased demand particularly in China, have severe effects on the commodities market — and at the pump.

"I would suggest that in the international markets, there is a disequilibrium," Spitzer told CBS News correspondent Russ Mitchell. "We have seen demand for oil increase dramatically year after year, especially due to the increase in demand in the Asian markets," which the administration could have foretold.

Spitzer's New York office has made 18 legal cases of gas gouging, particularly in the immediate wake of Hurricanes Katrina and Rita. While Spitzer called the gouging "wrong," he said that even consumers who comparison-shop can have little effect on the market.

"Realistically, as consumers, we cannot effect the global market or even the national market," Spitzer said. "We are the pawns. We are stuck."

Trace the pump prices' roots in a Reality Check.

Senator Bob Menendez, D-N.J., says oil companies blamed an "act of God" for fuel shortages and price increases last year. Now he says it is "crystal clear that the current spike in gas prices is at least partly due to an act of greed." Spitzer called out oil companies for having "internalized all of the profit."

Menendez is proposing a 60-day suspension of the gasoline tax. He says repealing tax breaks for energy companies could cover the cost.

Meanwhile, the country's three largest oil and gas companies are expected to report combined first-quarter profits this week in excess of $16 billion, a 19 percent surge from last year that is sure to complicate life for the industry in Washington, where elected officials are scrambling for ways to assuage angry consumers and businesses.

And experts said Bush's actions wouldn't have much impact on prices at the pump. The president warned that motorists would have to dig deep into their pockets all summer long, tipping his hat to the reality of high prices, CBS News correspondent Jim Axelrod reports.

"Energy experts predict gas prices are going to remain high throughout the summer and that's going to be a continued strain," Mr. Bush said.