Can Policies Affect Gas Prices?

ByABC News
August 30, 2004, 2:43 PM

W A S H I N G T O N, March 31 -- It's impossible for drivers to ignore.

In San Diego these days, regular unleaded gasoline is going for well over $2 a gallon. The nationwide average cost is $1.76 per gallon, up 28 cents since December.

Economists warn that high prices at the pump will ripple through the whole economy. Airlines are expecting larger losses than they'd originally predicted. The trucking industry will spend more money to ship goods, driving up prices for consumers.

As a political issue, it's a no-brainer. Both the president and his Democratic rival are promising relief.

"What we need is an energy plan so we're less dependent on foreign sources of energy," President Bush said Tuesday in Appleton, Wis.

The White House says the administration's energy bill, which has languished in Congress for three years, offers a comprehensive solution with an emphasis on growing domestic oil production.

"We continue to go from crisis to crisis when it comes to whether it's electricity, or whether it's gas prices. We need comprehensive solutions, not patchwork crisis management," said White House spokesman Scott McClellan.

But each time the Senate has tried to pass the president's energy bill, it has been watered down. A controversial provision to allow drilling in the Alaska National Wildlife Refuge has been removed.

Analysts say without that provision, the bill doesn't do much to increase domestic oil supplies.

"If you take ANWR off the table there is not much left in there to provide any substantial growth in domestic crude oil supplies," said Robert Ebel, chairman of the Center for Strategic and International Studies' energy program.

The president's energy plan also includes tax incentives to encourage domestic oil production. But a study by the Bush administration's own Energy Department found those incentives would have little effect.