http://www.planetark.org/dailynewsstory.cfm/newsid/15382/story.htm Planet Ark : Bush administration frets over fuel-price spike
USA: April 9, 2002 WASHINGTON - A sharp and rapid rise in gasoline prices in the past few weeks is a "serious concern" for the U.S. economy, especially with Iraq's new threat to halt oil exports to protest what it calls aggressive Israeli military action against Palestinians, the Bush administration said yesterday. As Americans plan their summer vacations, fuel prices have soared 25 cents per gallon, or 20 percent, since early March and could go even higher and threaten U.S. economic recovery if Iraq makes good on its threat, U.S. energy officials said. The jump in gasoline prices and Iraq's oil embargo is also expected to be used by Republican lawmakers in the U.S. Senate this week to push for new oil drilling in Alaska. The Bush administration and Republicans want to give oil companies access to drill in the pristine Arctic National Wildlife Refuge to reduce foreign oil imports. The plan is opposed by most Democrats and does not have enough support in the Senate at the moment to pass. Energy Secretary Spencer Abraham announced several steps to help stabilize U.S. fuel prices, which are expected to rise to the third-highest level in history this summer. "Higher gas prices are a great concern to this administration because they strain the budgets of America's working families, raise the cost of goods and services, and ultimately create a drag on the economy that can impact the livelihood of working Americans," Abraham said. He spoke at a news conference where the U.S. Energy Department forecast an average nationwide price of $1.46 per gallon for regular unleaded gasoline this summer. However, that forecast was prepared before Iraq's surprise announcement that it would suspend crude oil exports. Iraq, which exports nearly 2 million barrels per day of crude oil, said it would halt exports for 30 days to protest Israeli actions against Palestinians. Iraq is the sixth-largest oil supplier to the United States. Crude oil on the New York Mercantile Exchange surged nearly a dollar in early morning trading to slightly above $27 a barrel. The price of crude oil accounts for roughly 38 percent of the cost of one gallon of gasoline. $30 OIL POSSIBLE The Energy Information Administration said U.S. crude oil prices could spike by $4 to $7 to above $30 a barrel in the short term if Iraq halted shipments and no other producing nation made up the difference. "If there's no make-up for an Iraqi stoppage for 30 days, then, for at least a short period of time, increases certainly above $30 are possible," said Dave Costello, an EIA economist. "It's a little bit tough to say because there are a lot of variables out there." Another EIA official sought to downplay the impact of the Iraqi action. EIA acting administrator Mary Hutzler said there is excess capacity of about 7 million barrels per day around the world. "There is still the possibility that non-OPEC countries could increase their production as well," Hutzler said. "The real issue is if we get more turmoil in more countries.... and that's something we're going to have keep an eye on." CONSUMER HOTLINE The Bush administration assured consumers that it was watching fuel prices closely. "We are taking aggressive action to prevent further steep price increases at the pump," Abraham said. The Energy Department reactivated a consumer hotline for motorists to complain of gasoline price gouging. Abraham said he would meet this week with U.S. oil refineries and gasoline stations to encourage them to keep supplies moving smoothly. "We want to know what's going on out there," Abraham said. "A flawless distribution system will help us to minimize price spikes this year." Abraham also seized on the jump in gasoline prices as another reason why the Democratic-led U.S. Senate should adopt legislation allowing oil companies to drill in the Arctic National Wildlife Refuge. Several days ago, the administration released a study showing potential environmental problems with Arctic drilling but it quickly revised that study to minimize the threat to caribou near the drilling site. A recent Reuters survey of all 100 senators showed the drilling proposal seemed doomed with 50 senators on record in opposition. Under Senate rules for dealing with controversial measures, 60 votes are needed to cut off debate and allow a vote. Story by Tom Doggett REUTERS NEWS SERVICE ------------------------ Yahoo! Groups Sponsor ---------------------~--> Buy Stock for $4 and no minimums. FREE Money 2002. http://us.click.yahoo.com/k6cvND/n97DAA/ySSFAA/9bTolB/TM ---------------------------------------------------------------------~-> Biofuels at Journey to Forever http://journeytoforever.org/biofuel.html Biofuel at WebConX http://www.webconx.com/2000/biofuel/biofuel.htm To unsubscribe from this group, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
