Richardson defends Clinton administration energy policy

By Mike Ferullo/CNN

WASHINGTON (CNN) -- Embattled Energy Secretary Bill Richardson told a House panel Tuesday that current Clinton administration energy policies are based on "steadfast principles" and that both the White House and Congress had to address high gasoline prices.

Energy Secretary Bill Richardson

"Prices are still unacceptably too high, we are working vigorously to bring them down. My main message here is that we have to do this in a bipartisan fashion. We need to take some steps and Congress needs to take some steps," Richardson told members of the House International Relations Committee.

During the past two weeks, Richardson -- once regarded as a strong Democratic vice presidential candidate -- has been the target of angry congressional attacks over poor security at the Los Alamos nuclear weapons lab in New Mexico, as well as charges that the Clinton administration lacks a comprehensive energy policy.

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Rising oil prices

Several members of Congress have called for Richardson's resignation -- most recently Sen. Rod Grams, R-Minnesota, who said Tuesday that the department had no energy policy, but an "energy disgrace" and that President Clinton ought to "ask Richardson to step down."

Richardson continued to reject those calls Tuesday, and instead said he saw encouraging signs that the recent spate of price hikes have abated. " Hopefully, we're turning a corner on gasoline prices," he told House committee members.

Rep. Benjamin Gilman

The national retail price for a gallon of gasoline dropped 3 cents this week, Richardson said. However, prices are still up 55 cents a gallon from a year ago. Committee Chairman Benjamin Gilman, R-New York, has blamed the Organization of Petroleum Exporting Countries -- which sets production levels for many oil-producing nations -- for the recent spike in gas prices in this country.

"Oil prices today are higher than at any time since the Iraqi invasion of Kuwait. Continued high prices for gasoline and other fuels are now beginning to stunt our economic growth," Gilman said Tuesday.

Earlier this week, Gilman introduced a measure to make it easier to file legal action against overseas energy cartels by removing a legal obstacle known as the 'Act of State' doctrine, under which "courts generally don't question the official acts of foreign governments," Gilman said.

The bill would allow judges to seize OPEC's American assets, according to an aide to the congressman.

A second bill introduced by Gilman directs the president to ensure that the United States and other countries and organizations are not "directly or indirectly promoting the oil price-fixing activities, policies, and programs of OPEC."

The purpose of the two bills, Gilman said Tuesday, is "to ensure that this administration adopts a consistent and a comprehensive policy of opposition to OPEC and to other similar cartels.

OPEC, which dominates world supplies, cut oil production last year to force the per-barrel price up after it plummeted to nearly $10 in late 1998. In March, prices hit a 10-year high of $34 per barrel.

However, Richardson said that the Clinton administration was engaged in a diplomatic, rather than strong-armed, approach in lobbying the cartel to boost production.

"What we're doing is trying to find ways you balance your diplomatic efforts," said Richardson. "Our diplomatic efforts of quiet diplomacy, engaged diplomacy, are working. That doesn't mean we don't continue dealing with OPEC, but it's better to engage them in a way that produces results." OPEC decided last Wednesday to increase output moderately for the second time in three months, but the move is not expected to translate into lower prices at U.S pumps for at least another six weeks.

But Rep. Steve Chabot, R-Ohio, said the cartel's increase was not enough to bring relief in the near future. He also expressed frustration at what he said were Richardson's repeated promises that prices would drop after his meeting with OPEC leaders this Spring.

"Frankly, your administration is rapidly losing credibility," Chabot said.

Richardson fired back during the hearings by calling on the Republican-led Congress to provide funding requested by the White House to develop alternative energy sources and give consumer tax credits for energy conservation.

Richardson also defended attacks on Vice President Al Gore, saying "no" when asked if Gore favored higher gasoline prices to promote his environmental agenda.

"Vice President Gore does not favor higher gasoline prices for consumers. That is not the case," Richardson said."

Recent drops in gas prices have fueled claims that the oil industry has been involved in price gouging.

Despite the downward trend, motorists in parts of the Midwest and other hard-hit regions continue to face gas prices of more than $2 per gallon.

Reps. David Bonior, D-Michigan, and Dennis Kucinich, D-Ohio, announced plans Tuesday to introduce legislation that would place an emergency windfall profits tax on the oil industry.

"If oil companies make excessive profits, they should be subjected to a stiff tax on those excessive profits. The threat of heavy taxation will send a clear signal to oil companies that price gouging simply will not pay," Kucinich said.

He said the taxes would be based "on the history of oil company profits."

The measure would also create new tax credits for consumers who buy vehicles with high gas efficiency, and offer greater federal subsidies in exchange for reduced mass transit fares.

Oil industry experts have cited numerous possible culprits for the price hikes, including recent increases in the price of crude oil as well as the EPA-mandated sale of reformulated gasoline designed to reduce carbon monoxide and other emissions.

However, the Clinton administration has insisted that the reformulated gasoline is not the cause of the problem, and has mounted an aggressive Federal Trade Commission inquiry into the possibility of price-gouging by the oil industry.

In the meantime, House and Senate Republicans have called for a temporary repeal of the 18.4 cents-per-gallon federal gasoline tax during the summer driving season.

Texas Republican Sen. Kay Bailey Hutchison plans to introduce legislation this week calling for a full repeal of the taxes, most of which is used to fund federal highway construction projects.

Lawmakers had initially called for a temporary repeal last spring, but backed off such a plan after it was revealed that states would lose billions in federal highway funds.

Clinton on Monday warned Congress not to pass such a measure.

"Now, if the Congress wants to consider some sort of relief on the federal gas tax... they would have to be willing to defer substantial highway projects," Clinton told reporters. "That's something they have to come to terms with."

Reuters contributed to this report.

Tuesday, June 27, 2000

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• Democrats line up against GOP prescription bill as House prepares to vote
  
• latimes.com: Nader targets candidates on child poverty
  
• White House claims Congress risks 'do-nothing' label if no budget compromise reached
  
• Richardson defends Clinton administration energy policy
  
• House leaders agree to lift food and medicine embargo against Cuba
  
• How Elian helped poke a hole in Cuba embargo
  
• House rejects effort to thwart Smith & Wesson gun-safety deal
  
• Rep. Thomas denies conflict of interest with pharmaceutical industry lobbyist
  
• Supporters of open California primary vow to try again
  
• Foe of campaign finance laws sworn in to Federal Election Commission
  

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