April 25, 2006
The Four Pitfalls: Public Citizen Rebuts Bush’s Weak Energy Policy Proposals
President Bush today outlined a four-point plan to deal with high energy prices, but his prescription is totally ineffective. Bush proposes to:
Encourage drivers to purchase hybrid or clean-diesel vehicles: There is already a long waiting list to buy certain hybrid cars and demand is outstripping supply. The Bush administration just blew its best chance to improve fuel economy when it announced only meager increases in standards for light trucks for model years 2008 to 2011. It set lower standards for the worst gas guzzlers, rewarding automakers that build ever-larger vehicles. Meanwhile, the car fuel economy standard has stagnated since the late 1980s.
Increase supply by temporarily stopping purchases or deposits to the Strategic Petroleum Reserve: The Wall Street Journal reported on April 18 that crude oil inventories in the United States are already at eight-year highs, which means there is already a huge excess supply of crude oil in America. Bush is addressing a problem that does not exist.
Waive clean air rules for gasoline blends and relax construction permit compliance for oil refineries: Current fuel blends help provide Americans with cleaner air. They are typically required in cities that are currently in noncompliance with minimum federal air quality standards. Waiving these and other rules will make it easier for oil companies, but will make America’s air quality worse. If compliance with environmental rules was such a burden, one would expect it to be reflected in higher costs to the companies, which would reduce their profitability. To suggest that oil companies cannot afford to comply with environmental regulations is laughable in the face of record-high profits and excessive compensation packages enjoyed by Exxon ($36 billion in profits in 2005, plus $70 million in compensation and a $400 million retirement package for its CEO) and other companies.
Investigate illegal manipulation of gas prices: Oil companies are not engaging in illegal manipulation of prices – the real problem is legal manipulation. The current law is totally inadequate to protect consumers. The country needs strengthened laws, not another toothless investigation.