Frist: Government Needs to Investigate High Gas Prices

April 25, 2006 — -- This morning, President Bush will propose a four-point plan that includes investigating oil companies and investing in alternative fuel, but experts say the plan will probably not do too much in the short term to ease the pain commuters feel -- and they are blaming the politicians.

"I have difficulty believing that a president who has interests in oil is really concerned about the well-being of people who are paying so much for it," one motorist said to ABC News.

Politicians blame each other, and oil companies and regular people seem to agree.

Senate Majority Leader Bill Frist, R-Tenn., and Speaker of the House Rep. Dennis Hastert, R- Ill., sent a letter to the president urging him to investigate gasoline price gouging and whether or not the market was being manipulated.

"This $2.91 -- over $3 in some areas right now -- cannot be sustained by the person driving their kids to school or filling up their tractor with fuel," Frist said. "There is no silver bullet -- that's obvious to most people now -- but we need to make sure, though, the price is ultimately determined by supply and demand, that the markets themselves work."

Frist said that Big Oil's record profits needed to be investigated by the Department of Justice and the Federal Trade Commission. Over the last four years, profits for companies like Exxon Mobil Corp. have jumped more than 260 percent. Last fall, the Senate held hearings to investigate why this was happening, but Sen. Ted Kennedy, D-Mass., said that was not enough.

"The president should have called the head of the oil companies into the White House … a week ago," Kennedy said on NBC's "Meet the Press."

"He ought to be pointing out that hardworking Americans, middle-class people who have their sons and daughters in Iraq and Afghanistan, that this is not a time for greed."

Frist said that oil executives had told the Senate that those profits would be invested in increasing the supply of oil -- which would eventually drive prices down -- and that the Senate needed to speak to the executives again to see whether or not that had happened.

Kennedy's anger and sense of urgency was echoed all over the streets of America.

"I think the big oil companies are pocketing too much money, and they're taking it out on the little guys, which would be myself and everyone else that comes in here," another motorist said.

While they fume and finger-point, drivers still need to figure out how to pay for that next $50 fill-up.

With gas prices rising again, Americans are developing a number of coping mechanisms -- including taking public transportation. Ridership on the Dallas subway is up 10 percent this year, and it's up 50 percent on the commuter trains in Salt Lake City. The Washington, D.C., Metro saw two of its top 10 busiest days ever in the last week.

Across the country, some drivers are taking more extreme steps. Some are pawning their belongings to buy gas. Krista Water of Alabama pawned her wedding rings.

"I hopefully will never have to pawn anything again for gas, but if they keep going up, it looks like a lot of my jewelry will be in the pawn shop for gas just to make it back and forth to work," she said.

The Power of Conservation

Some people are calling for an economic revolt. The idea is that everyone cuts down on driving, which cuts down demand for gas, which cuts down prices.

"There is an easy fix, and the easy fix is to use a little bit less to get through this rough period," said Tom Kloza of Oil Information Service.

"Americans can step up by slowing down to less than 60 miles an hour, tune up the cars, replace the air filters, can improve your fuel efficiency by anywhere from 15 [percent] to 20 percent," Frist said. "Using both car pooling as well as alternative forms of transportation, buses and metros as well, we have to look at the conservation, the demand side of the equation as well."

Frist said another option would be to increase domestic production of gas and oil, which could mean drilling in the Alaska region as well as the outer continental shelf of the nation's coast.

"Remember, we're 60 percent dependent on foreign sources of oil coming from unstable regions of the world, whether Nigeria or Iran," he said.

Later this week, the big oil companies are scheduled to tell Wall Street how much money they've made over the first three months of the year.

"The price ultimately is determined by supply and demand," Frist said. "We have countries like China and India and the United States, all with booming economies now. The demand is out there, and it is aggressive."