Soaring prices at the pump mean gas pains for Bush

President George W. Bush, in trouble over soaring gasoline prices, ordered a probe on Tuesday into any price gouging, called for an end to tax breaks for Big Oil and suspended putting oil into the U.S. emergency stockpile.

As a short-term measure, Bush also gave the Environmental Protection Agency authority to suspend federal clean-burning gasoline rules this summer that are forcing consumers to buy expensive new gasoline blends.

Bush was acting to reverse prices that have soared above $3 a gallon in many parts of the country and are contributing to a new low of 32 percent in his job approval rating, according to a CNN poll.

Bush, trying to stave off a potential election-year problem for Republicans eager to hang on to control of the U.S. Congress, acknowledged Americans are in for tough times during the summer driving season.

"Energy experts predict gas prices are going to remain high throughout the summer. And that’s going to be a continued strain on the American people," he told the Renewable Fuels Association, a group advocating expanded use of ethanol as an alternative fuel source.

Bush said the Justice Department and the Federal Trade Commission had urged state attorneys general to vigorously enforce laws against price gouging and illegal manipulation that may have contributed to rising gasoline prices.

Red Cavaney, president of the American Petroleum Institute trade group that represents oil companies, said its members would cooperate.

But he noted prior investigations had come up empty and predicted the industry will be "exonerated in any of these claims of anti-competitive or collusive behavior."

PAY BACK OIL LOANS

Bush also gave U.S. oil companies more time to pay back emergency loans from the Strategic Petroleum Reserve to put more oil on the market, saying the reserve was sufficiently large that further deposits were not needed until the fall.

The amount of remaining oil that was scheduled to be delivered to the reserve was 2.1 million barrels in May, which would supply about two hours of the average 21 million barrels of oil the United States consumes each day.

"Every little bit helps," Bush said.

Mark Williams, a Boston University professor and expert on energy industry risk management, called the move "political window dressing and a drop in the proverbial oil bucket."

A former Texas oil man who in recent months has advocated curing America of its addiction to oil, Bush was unusually blunt with oil companies enjoying record profits. Exxon had $36 billion in profits last year and gave a $400 million retirement package to ex-chief Lee Raymond.

He said they should use some of their largesse to invest in new refineries and researching alternative fuel sources. The fact that no new refineries have been built in 30 years is frequently cited as a reason contributing to soaring gas prices.

Bush called on Congress to take away from the oil companies about $2 billion in tax breaks over 10 years, such as subsidizing research into deepwater drilling.

Bush had signed the tax breaks into law as part of a comprehensive energy bill last summer. He said the tax breaks are now unnecessary at a time of "record oil prices and large cash flows."

"Taxpayers don’t need to be paying for certain of these expenses on behalf of the energy companies," Bush said.

Massachusetts Democratic Sen. John Kerry took Bush up on the offer, saying he would introduce legislation on Tuesday to repeal the tax breaks and that he hoped Bush was sincere.

"For a moment, President Bush finally stopped talking like an oil company executive," Kerry said.

Senate Minority Leader Harry Reid, a Nevada Democrat, called for Americans to have a 60-day holiday from the federal gas tax of 18.4 cents a gallon, paid for by the $2 billion in reduced oil company tax breaks.

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