Energy chief: High gas prices could last 3 years

CNN (Washington)
April 30, 2006

Acknowledging the energy situation is a "crisis," U.S. Energy Secretary Sam Bodman said Sunday it could take three years before drivers get relief from high gas prices.

Speaking on NBC's "Meet the Press," Bodman blamed the increase in gas prices on the rising cost of a barrel of oil.

"The suppliers have lost control of the market and therefore, demand exceeds supply," Bodman said.

"Clearly we're going to have a number of years -- two or three years -- before suppliers are going to be in a position to meet the demands of those who are consuming this product."

According to the U.S. government's statistics, the average cost of a gallon of gas has risen about $.60 in the past two months.

Crude oil prices went above $75 a barrel in late April, and while they have eased since then, they're still up about 17 percent this year.

Speaking on the same program, assistant Senate Democratic leader Dick Durbin of Illinois denounced Bodman's assertion that the oil companies are unable to bring down the price of gas.

"Here we have the most enormous profits in the history of the United States of America in the history of business," Durbin said.

"All of the market factors you described may suggest that the product is going to be more expensive to sell, but they don't forgive what I think is an outrageous profit-taking by this industry."

When asked if he believed the situation was a crisis, Bodman said, "I would call it that, yes."

"I think there is great concern ... it's something this president takes very seriously, it's something the entire administration takes very seriously ... and we're doing everything we know how to do that works.

"Not the things that we know for a fact that don't work."

President Bush on Friday rejected calls to tax oil companies' record profits, but said he expects those companies to reinvest those profits in alternative fuels and new energy technologies.

"My attitude is that the oil companies need to be mindful that the American people expect them to reinvest their cash flows in such a way that it enhances our energy security," Bush said.

Such investment projects could include new pipelines, expansion of refineries, and more exploration and investment in renewable sources of energy, he said.

Rep. Bart Stupak of Michigan said in Saturday's Democratic radio address that Congress should roll back tax breaks for major oil companies.

"Republicans continue to turn a blind eye to the oil industry's activities," he said. "From this Republican controlled Congress, we hear more of the same: Let's just drill our way to energy independence, sacrifice our environment, and provide big tax breaks to Big Oil."

He pointed to a bill from Rep. Brian Higgins of New York, which Stupak said would put "the money where it's needed the most: helping pay energy bills for low-income Americans, small businesses, farmers, and ranchers."

Bush, in a speech last week, proposed several measures to tackle gas prices, including eliminating $2 billion in tax breaks for oil companies.

Several Democrats have said that figure should be increased to $10 billion.