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Congress responds to gas-pump anger

House backs bill on price-gouging

WASHINGTON -- The House yesterday overwhelmingly approved legislation to punish oil companies for any incidents of price-gouging, hoping to quell voter anger over escalating gasoline costs and targeting an industry that has been making record profits.

The bipartisan vote, in a Republican-led House normally reluctant to increase regulation of industry, was the first in a series of measures being considered by Congress, which is increasingly desperate to do something about gas prices before the November elections.

The price-gouging measure would impose criminal penalties and fines of up to $150 million for companies found to be cheating consumers. The legislation would give the Federal Trade Commission the power to define what constitutes excessive pricing, and allow the FTC, the Justice Department, and state attorneys general to investigate oil companies and impose fines.

Republican leaders had been scrambling to offer legislation to assure voters they are listening to their complaints about paying gas prices of $3 a gallon and higher.

Later in the day, the House failed to approve a bill to streamline the approval process to build more oil refineries, which supporters say would get more gasoline to the market. The vote, held without any hearings, required a two-thirds majority, which it did not get. But if brought up again under regular rules, as sponsors said yesterday they planned to do, the bill would need only a majority to pass.

Meanwhile, the Senate is soon expected to take up a measure to open the Arctic National Wildlife Refuge to oil drilling, and to increase capacity for oil refineries. Both chambers are also mulling a plan to give President Bush the authority he has requested to consider imposing fuel efficiency standards on passenger cars. Senate Republicans this week abandoned a proposal to give Americans a $100 rebate to subsidize gas purchases after the idea was criticized by lawmakers in both parties.

Democrats want to raise fuel-efficiency standards immediately, rather than give Bush time to study the matter.

Lawmakers and energy analysts said that, despite the flurry of activity, they are pessimistic that any of the measures would do much to ease gas prices before voters go to the polls in November. The per-barrel price of oil has risen sharply in recent weeks and months, from $49 about a year ago to $66.50 per barrel on April 7, and to $74 per barrel earlier this week. Yesterday, it dipped by about $2.

While Democrats, too, say they are hearing complaints from constituents about gas prices, they are convinced it will be Republicans -- the party in charge of both the White House and Congress -- who will be punished in November.

Republicans lost scores of seats in 1974, after gas prices escalated during the GOP-led Nixon and Ford administrations, and the Democrats lost the Senate and the White House in 1980, after consumers suffered through higher prices, gas shortages, and long lines at gas stations during the Democratic-led Carter administration, said Representative Edward Markey, Democrat of Malden, a senior member of the House Energy and Commerce Committee.

The current situation, he said, ''is a nightmare scenario for the Republicans. They have to have a response" to gas price hikes, Markey added. But he and others said that nothing under consideration now would reduce prices in time for the election.

Republicans expressed frustration: ''What are they [Democrats] for? They protest. They complain. And all they do is obstruct any chance for Americans to have lower gas prices," said Deborah Pryce, an Ohio Republican who is a chief target of Democrats this fall.

''Americans aren't concerned about politics -- they are concerned about policy," added House Energy and Commerce Committee chairman Joe Barton, Republican of Texas, decrying the Democrats' opposition to the refinery bill.

But outside specialists warned that energy policy must be developed over time. Most of the levers within the control of the Congress -- from opening new areas for drilling to measures aimed at forcing auto manufacturers to produce more fuel-efficient cars -- will take years to have an effect.

''It's difficult to say whether anything is going to have an impact in the short term," said Bob Slaughter, president of the National Petrochemical and Refiners Association.

The more immediate fixes -- especially the price-gouging bill -- seem more likely to reassure consumers that they are being treated fairly, and that their government is acknowledging the need for action.

Kevin Book, an energy analyst with Friedman, Billings, Ramsey, said gas prices are largely out of the control of Congress, because there's little that can be done in the short term to reduce demand, and because US production of oil is a small slice of the international market.

''We don't control oil prices, and we're a small part of the production" of oil, Book said.

Lawmakers who voted for the price-gouging bill, while conceding it would not ease gas prices in the future, said the legislation would send an important message to the nation's oil companies.

''I don't think it will do very much," said Representative Maurice Hinchey, Democrat of New York. ''But I think it's a major step in the right direction."

Barton acknowledged that the other proposals before Congress would not do much in the short run, either. But he said the only conceivable moves that would reduce gas prices immediately -- setting government price controls or raiding the Strategic Petroleum Reserve -- were not feasible.

By depriving companies of incentives to produce more gasoline, he said, price controls would cause shortages, as they did in the 1970s, depleting the strategic reserve -- fuel set aside for national emergencies -- would be a ''short-sighted" answer to a complicated, long-term problem.

Nonetheless, Bush last week promised to stop government purchases of oil to add to the strategic reserve. Analysts said the move would reduce demand by a small amount only.

Barton, along with other GOP leaders, pushed through a sweeping energy package last year that provided large tax breaks for the oil and gas industry, along with incentives for the development of alternative fuels.

Last year's bill, which dwarfs the proposals currently on the table in size and scope, took five years of heated negotiations. It is too early to judge its impact, analysts said, adding that Congress is too divided to come together on another comprehensive energy plan quickly, even if voters demand it.

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