Rising gasoline prices give Gore politcal fuel

Candidate accuses oil companies of collusion, gouging

June 22, 2000|By Jonathan Weisman | Jonathan Weisman,SUN NATIONAL STAFF

WASHINGTON - Sensing as much political promise as peril in soaring gasoline prices, Vice President Al Gore has unleashed an unusually harsh condemnation of the oil industry, accusing energy companies of "collusion" and price "gouging."

Gore issued a statement late Tuesday night decrying what he called oil industry profit gains of "500 percent in the first part of this year" and demanding an investigation into allegations of price fixing and collusion.

"These enormous and unreasonable profits suggest that Big Oil is gouging American consumers," Gore said. "We need to get to the bottom of this."

Though economic anxieties tend to work against the candidate most identified with the status quo, Gore advisers have concluded that voters are far more likely to blame oil companies for high pump prices than they are the Clinton administration.

The vice president's criticism of the oil industry would at least show voters he is in touch with their concerns.

It also allows Gore to tie his Republican rival, Gov. George W. Bush of Texas, to the industry in which he once worked.

Bush responded yesterday by saying the Clinton administration bore some of the blame for gasoline prices, which have shot above $2 a gallon in some parts of the Midwest. "I want to remind people that this administration is devoid of an energy policy," Bush told reporters in Los Angeles.

With the summer driving season under way, gasoline prices are rapidly evolving into a political issue, especially because they are afflicting the region that could very well decide the presidential election in November, the industrial Midwest.

Such key battleground states as Illinois, Wisconsin and Michigan have been hit hard by rising gasoline prices. In Chicago, gas is as high as $2.30 a gallon.

The Federal Trade Commission announced yesterday that it had begun an investigation into possible collusion by the oil companies to prop up gasoline prices in Chicago and Milwaukee, after a preliminary review found evidence of "anti-competitive" practices, said Mitch Katz, an FTC spokesman.

Bush said yesterday that he supports the FTC investigation, and today a bipartisan group of senators will urge the FTC to expand the inquiry nationally.

Carol M. Browner, the administrator of the Environmental Protection Agency, went to Capitol Hill yesterday to hear demands by some Midwestern lawmakers, including House Speaker Dennis Hastert, an Illinois Republican, that the EPA temporarily suspend clean-air standards.

Those standards have forced many states and local governments to adopt cleaner-burning fuel that tends to raise the price at the pump. Oil industry officials have blamed such fuels for much of the price increase.

Though his message of the day yesterday was supposed to be on Social Security and inheritance tax relief, Gore pressed his campaign against the oil companies, telling union members in Iowa: "I am going to keep challenging Big Oil until America gets some straight answers and affordable gas prices they deserve."

Political pressure might already be yielding results.

Wholesale prices have dropped from $1.65, June 7 to $1.18 this week, according to the American Petroleum Institute, the oil industry's lobby in Washington. That trend should bring drops in retail prices soon, said Red Cavaney, the institute's president.

OPEC ministers meeting in Vienna announced yesterday that they would boost oil production by a modest 3 percent, about 708,000 barrels a day, beginning July 1.

And supply problems are diminishing, as pipelines are repaired and manufacturers become more proficient at producing new, cleaner-burning fuels, industry officials said.

"Let the market work," Cavaney pleaded. "This will all come through in short order."

For Gore, the issue could potentially divide two key groups he sorely needs on his side in the election: environmental groups and Midwestern Democratic lawmakers who can rally their constituents.

Members of Congress have bombarded the vice president with demands for relief, a senior Gore campaign aide said, and some have asked for a relaxation of environmental regulations.

Environmentalists are adamantly opposed.

"The oil companies are trying to overturn environmental regulations they couldn't overturn on their merits," said Dan Becker, director of the Sierra Club's energy program.

Still, the Gore campaign is hoping to turn a potential political liability into a plus. Voters will be more likely to blame the oil companies than the White House for the painful gasoline prices, campaign aides say, and they hope that could hurt Bush, who once worked in the oil business and still has close ties to energy companies.

Gore aides trotted out a quote from Bush's unsuccessful bid for the House of Representatives in 1978, when he said, "There's no such thing as being too closely aligned to the oil business in West Texas."

In more recent history, oil and gas interests have contributed nearly $1.5 million to the Bush campaign, according to the nonpartisan Center for Responsive Politics.

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