U.S.

Grilling Bill Richardson

By CBSNews.com staff CBSNews.com staff

June 27, 2000 / 12:45 PM EDT / CBS

It's not supposed to be easy when the buck stops at your desk and Energy Secretary Bill Richardson is in a good position to testify to the veracity of that old saw.

Richardson was back on Capitol Hill today, a week after his Senate testimony about security problems at the Los Alamos National Laboratory.

The Energy Secretary was grilled by the House International Relations Committee on the subject of high gasoline prices, at a hearing on whether OPEC's pricing policies are a threat to the U.S. economy.

"Prices are still unacceptably too high," said Richardson, commenting on last week's 2.3 cent decline in the U.S. retail price for unleaded gasoline. The drop announced by the Energy Department, to a price of $1.658 a gallon, was the first decline in eight weeks. Prices in the Midwest fell 8 cents for conventional gasoline and 12.2 cents a gallon for cleaner burning reformulated gasoline.

That's good news, said Richardson, who also indicated it's too soon to call the price drop a trend. "Hopefully, we're turning a corner on gasoline prices."

"The oil companies have some explaining to do," Richardson told the House panel, saying the FTC has been looking into why cleaner-burning gas mandated in some states is selling at sharply higher prices.

Pain At The Pump

Just how high are gasoline prices? Check out the American Automobile Association's constantly updated chart on gas prices nationwide, or, for a look at prices in your area, check out the AAA's chart on gas prices, state-by-state.

That's not the only oil industry matter the government will be examining, Richardson told Congress, noting gasoline inventories were down by about 15 percent as the nation headed into the summer driving season.

"Refineries have some explaining to do," said Richardson.

OPEC just last week reduced its production by 708,000 barrels a day, but that reduction hasn't put a dent in wholesale oil prices and obsrvers say a further reduction might be needed to do that.

OPEC has said a further reduction might, in fact, be adopted if there is no moderation in oil prices.

Wholesale gasoline prices meanwhile have been coming down in U.S. markets, particularly the Midwest, where the pain at the pump was considerably higher than in many other parts of the country.

The lower prices are still quite high compared to only a few months ago. The Federal Trade Commission last week opened an investigation into whether gasoline companies are engaging in unfair pricing practices.

The oil industry has denied any wrongdoing and says that will be the ultimate conclusion of the FTC probe.

Some industry critics, however, including high level members of the Clinton administration, have questioned why wholesale prices in the most high price areas of the nation started heading down as soon as talk began that the FTC might conduct an investigation.

An industry spokesman has said that the price drop has nothing to do with the federal probe and everything to do with market influences.

Gas prices are expected to be on the agenda tomorrow at President Clinton's news conference, his first in three months. White House press secretary Joe Lockhart got a head start on that topic today, saying that Republicans attacking the Clinton administration for having no energy policy should explain why they voted to cut funding for research into fuel-efficient cars.

Lockhart says GOP fingerpointing on gas prices amounts to "hysteria." He adds: "I think the finger has to start pointing back in their direction."

Republicans claim that President Clinton hasn't been tough enough on OPEC countries and the Clinton administration environmental policy has been choking domestic oil production.

Senate Republicans have proposed suspending the federal gas tax while prices are high. While President Clinton hasn't rejected the idea outright, Lockhart dismisses it as not being a "serious" proposal.

Two Democrats meanwhile are calling for a tax on windfall profits of oil companies. Michigan congressman David Bonior, the House Minority Whip, and Ohio congressman Dennis Kucinich acknowledge their bill faces an uphill battle in the Republican-controlled congress.

Kucinich says oil companies are just out to "sock the consumer." Bonior says oil companies' profits are too high and Congress should do everything it can to get those profits down.

Both argue the proposed windfall profits tax is the best way to stop spiraling gasoline prices. They believe their measure will get support from lawmakers facing outraged consumers.