Thursday, May 04, 2006

Republicans scramble for pump price solution

Republicans scramble for pump price solution
By Chris Baltimore

WASHINGTON (Reuters) - Republicans in Congress scrambled on Wednesday to find a new way to deal with soaring gasoline pump prices after a plan to hand out $100 checks to consumers fell flat.

The House of Representatives rejected a plan to boost U.S. refinery capacity by revamping state and federal permitting schemes and encouraging building on abandoned military base sites.

A handful of House and Senate lawmakers went to the White House for a "brainstorming session" on energy proposals, after prominent Republican lawmakers including House Majority Leader John Boehner dismissed the $100 check proposal as "insulting" to consumers.

President George W. Bush said proposals ranged from building better battery-powered gasoline-electric hybrid cars, to producing more motor fuel from sources like corn and building new refineries.

Republicans, fighting to hold on to their majority in Congress, were struggling to find new ideas at the meeting.

"I don't think there were any proposals that have not been kicked around," said Sen. Pete Domenici, chairman of the Senate Energy Committee. The New Mexico Republican said there are no quick fixes to bring down energy prices so conservation will need to be more of a focus.

Sen. Kent Conrad, a North Dakota Democrat who also met with Bush, said "there was an air of seriousness" and urgency in dealing with the problem because of risks to the economy.

With gasoline prices above $3 a gallon in many U.S. cities, pump prices have been the main topic of discussion of both parties in Congress as lawmakers fretted that voters will vent their rage in the upcoming November elections.

Nationwide gasoline pump prices averaged $2.92 a gallon last week, according to government figures, just short of the record $3.07 hit last September after Hurricane Katrina walloped Gulf Coast oil installations.

One way to solve the crunch, Republicans say, would be to speed up permits to build new refineries.

House leaders fast-tracked a proposal by Republican Reps. Joe Barton of Texas and Charles Bass of New Hampshire that would tap the Environmental Protection Agency to coordinate siting, permitting and approving of refineries.

The vote on the bill was 237 to 188, far short of the two-thirds majority needed to pass fast-tracked bills.

Some 185 Democrats voted against the bill, spurring House Majority Whip Roy Blunt to accuse them of obstructionist tactics.

"If we want to help consumers at the pump, we need to address refining capacity," White House spokeswoman Dana Perino said. "Unfortunately, there are some Democrats who don't want to do that."

Barton said he would bring the refinery plan up for another vote next week where it could pass with a simple majority.

Many Democrats say the bill would have short-circuited state permitting powers, and said it gives oil refiners incentives that they don't need.

U.S. refiners don't want to build because "the dirty secret is they're not going to make any money off of that," said Rep. Hilda Solis, California Democrat.

The United States uses about 21 million barrels per day of gasoline, jet fuel and other refined petroleum products, but domestic refineries only churn out about 17 million bpd, Barton said.

That means that industry will have to spend $40 billion to $60 billion on new capacity to fill the gap, Barton said.

The House also passed a measure that would make it a federal crime for companies to profiteer on pricing gasoline, diesel fuel, crude oil, heating oil and biofuel. Criminal penalties would be up to $150 million and two years in jail at the wholesale level and $2 million and similar jail time for retail violations.

Barton said he also sent "a fairly strongly worded letter" to big U.S. oil company executives asking them to detail how they will reinvest their record profits in expanding refineries and other energy infrastructure. Barton said he planned to call oil CEOs to participate in an energy panel hearing.

Senate Democrats on Thursday will introduce legislation to limit U.S. dependence on foreign oil imports.

(additional reporting by Susan Cornwell and Caren Bohan)