Officials predict years of high gas prices


WASHINGTON -- Gasoline prices will remain high for years to come and will be largely unaffected by the new White House plan to bring them down, Bush administration officials said yesterday.

Energy Secretary Samuel W. Bodman said the United States faces an oil price "crisis" because surging demand from such countries as China and India has outstripped supply.

"The suppliers have lost control of the market," Bodman told NBC's Meet the Press.

"Clearly, we're going to have a number of years -- two to three years -- before suppliers are in a position to meet ... demands," he said.

Joshua B. Bolten, the new White House chief of staff, acknowledged that President Bush's new program to deal with the price increases would have only a "relatively modest" effect on prices in the short term.

"This is a very large problem," he said on Fox News Sunday. "It's built up over many years -- decades, in fact. It's not going to be solved in the short run by some silver bullet. There are a lot of policies that need to be put in place over the long run to wean ourselves from our dependence on foreign oil."

The officials' appearances on the Sunday talk shows followed a week in which surging gas prices have alarmed Americans and frightened political incumbents facing midterm congressional elections in six months.

With polls showing gas prices as the No. 1 concern of most Americans, Bush brought out an energy plan last week that calls for, among other steps, reducing the flow of oil into the national strategic reserve, easing regulations on fuel ingredients, and encouraging the production and purchase of hybrid vehicles.

But administration officials said the only real solution was a long-term effort to reduce dependence on foreign oil, which now represents about two-thirds of U.S. consumption.

"We need to deal with the long-term problems of technologies that may get us out of this trap," Secretary of State Condoleezza Rice said on ABC's This Week.

She said that countries' efforts to ensure oil and gas supplies were "distorting international politics," which meant that "the quicker we get about the business of reducing our reliance on oil, the better we're going to be."

Administration officials insisted that Bush was not hypocritical in calling for reductions in the Strategic Petroleum Reserve, even though he attacked his Democratic opponent in the 2000 presidential election, Al Gore, for urging a similar reduction to help cut prices.

Asked if Bush's move was aimed at the elections, Bodman said, "I wouldn't call it a political move. I would say it's an effort to ... make a contribution to the reduction in price."

He added that, in any case, the oil price "is not something that is, I think, going to be meaningfully affected by whatever happens to the strategic reserve."

Some elected officials have called for limits on oil company profits, pointing out that the companies made $110 billion in profits last year and that the retiring head of ExxonMobil, Lee Raymond, was awarded a $400 million retirement benefit.

But Bodman said the administration was firmly opposed to a windfall profits tax.

"There are certain things that we know don't work, and windfall profits is one of them," he said. "That was tried 30 years ago; it did not work. It resulted in reduced production."

He said that though Bush had instructed the Justice Department to look into reports of price-gouging, the administration also doubts that it has occurred.

"We see no evidence of it," Bodman said. "But this is one of those situations where I guess I would call it 'Trust, but verify.'"

Despite the administration's opposition, an influential Republican senator, Trent Lott of Mississippi, told CNN's Late Edition that he was not dismissing the idea of a windfall profits tax.

"This may come as a shock to you, but I'm going keep my options open," he said. "If the oil companies don't stop escalating the gasoline prices, it is going to force the people to demand that the Congress do something more -- and the Congress is going to have to do more."

A top lobbyist for the American Petroleum Institute suggested that the oil industry, which has close ties to the administration, is one influential voice urging the White House not to go to war with Iran over its nuclear ambitions.

J. Bennett Johnston said that "saber-rattling" on Iran was helping drive up prices.

"We'd see gasoline prices above $5 or $6, crude oil above $100 [per barrel] if we bomb Iran," Johnston said on This Week.

Paul Richter write for the Los Angeles Times.

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