Tuesday, April 25, 2006

When The Prices Go Up Who's To Blame?

Here's an interesting exchange from today's press briefing at the Whitehouse. I have one question for you to cogitate while reviewing the text: Who is playing politics with whom?
Q Last one. Moments ago on the Hill, Senator Schumer of New York suggested that the President's remarks today, while welcome, left out, get tough on big oil. What sort of --

MR. McCLELLAN: The President made a very public comment calling on the energy companies to meet their responsibility to help reduce gas prices. Remember, let's look at where things stood last year. Many Democrats voted against the comprehensive energy plan that this President advocated from very early on in his administration and was finally passed last year. That is a plan that will help expand conservation, help develop new technologies to look at alternative sources of energy, like the President has outlined in his Advanced Energy Initiative.

It was Democrats, many Democrats, that have voted against efforts to expand domestic production capacity here at home and oppose efforts like opening up a small portion of ANWR to environmentally responsible exploration and production.

So I think the record is very clear. We're focused on practical solutions and acting on all fronts. Some are focused on playing politics.

Go ahead.

Q To follow up on his previous question. Do you not know what these -- the effect of these steps will be on gasoline prices, or are you just not --

MR. McCLELLAN: Well, I'll let other people who are more expert in this than me focus on this issue. But I think it --

Q Does the administration not know --

MR. McCLELLAN: Keith, you have to understand the situation we're in and the fact that this is a supply and demand issue. Supplies are tight because of the demand for oil, because we are in a global market now, where you have countries like China and India that are growing and increasing their demand for oil.

Now, there are some -- there are some parts that are temporarily affecting the increase in the price of oil, such as the switch in fuel mix that goes on now from MTBE to ethanol. And so I think it depends on a variety of factors. But what we ultimately have to do in the long run is get off our dependence on foreign sources of energy.

Q But my question is, these steps each have a cost. You're not putting as much into strategic reserve as you'd like. There's an environmental cost. Why would you take steps that have costs without knowing what the benefit would be?

MR. McCLELLAN: Well, all these steps will help address high gas prices in the short run. The benefit is that it will help consumers. But the ultimate solution to the problem that we are in today requires that we reduce our dependence on foreign sources of energy.

Q Okay, just lastly, you've asked the Justice Department -- the President has asked the Justice Department again to look at possible price gouging. Is there any evidence that there actually is price gouging going on?

MR. McCLELLAN: Well, that's why I think -- Terry or Jim asked that question earlier in the briefing. And you should go and look at -- the Department of Energy has a website that people can go to and report possible price gouging. And they talked about it in the aftermath of the hurricane how they found most people were acting responsibly, but there were some bad actors within that. And we're going to take action if we find it.

Q What I'm asking -- you're taking action and you're --

MR. McCLELLAN: Well, it's not only --

Q -- asking the Justice Department to look at something, these are the police coming to look for something, do you have any evidence that --

MR. McCLELLAN: It's also the state attorneys general -- the state attorneys general that have primary authority over this. And when gas prices are spiking like this, you have a responsibility to make sure that people aren't illegally manipulating price or engaging in price gouging. And that's what we're going to do. We're going to continue to take all these steps to help address high gas prices and to make sure that American consumers are treated fairly.

Q So the standard -- it sounds like the standard is, when people make a lot of money, you've got to take a look to see if they're doing something illegal --

MR. McCLELLAN: No, when you have gas prices that are spiking, you need to make sure you're acting on all fronts to do your part at the federal level to reduce those gas prices. Now, there's only so much you can do in the short run. But that's why we're taking these steps. In the long run, we need to go to the root cause.

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