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Bush Calls on Consumers to Conserve Energy
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Bush Calls on Consumers to Conserve Energy

Katrina & Beyond


The business news starts with the energy index of two hurricanes. President Bush is calling on Americans to conserve energy after Rita and Katrina. Although damage from Rita was lighter than feared, more than one-quarter of the nation's refining capacity was shut down in anticipation of the storm. Some of those refineries could remain closed for up to a month. NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

President Bush got a briefing on hurricane damage at the Energy Department yesterday. The one-time oil man heard that between Rita and Katrina, 100 percent of Gulf oil production is shut down.

President GEORGE W. BUSH: We understand there's been a disruption in supply, and we want to make sure that we do everything we can to help with the supply disruption.

HORSLEY: President Bush says he's willing to keep drawing on the Strategic Petroleum Reserve, as he did after Katrina, to make up for the lost crude oil. The administration is also extending waivers of environmental rules to make it easier to move gasoline where it's needed most. President Bush urged federal employees to carpool or use mass transit when possible, and he called on all consumers to do their part to save gasoline.

Pres. BUSH: We can all pitch in by using--by being better conservers of energy. I mean, people just need to recognize that these storms have caused disruption and that if they're able to, maybe not drive when they--a trip is non-essential, that would be helpful.

HORSLEY: The president praised Georgia Governor Sonny Perdue for ordering a school holiday both yesterday and today. The governor's spokeswoman, Heather Hedrick, says by parking school buses, Georgia expects to save half a million gallons of scarce diesel fuel.

Ms. HEATHER HEDRICK (Spokeswoman, Georgia Governor Sonny Perdue): One of the lessons we learned from Hurricane Katrina is that you shouldn't wait until the levees break to take action, and so Governor Perdue has been proactive in initiatives to conserve fuel in Georgia.

HORSLEY: Georgia had some of the nation's highest gasoline prices after Hurricane Katrina, and it's one of several states to set up consumer hot lines where drivers can report gas stations they suspect of price gouging. North Dakota Senator Byron Dorgan wants to go further and slap a windfall profits tax on major oil companies. Dorgan says it's not enough for the federal government to encourage people to drive less.

Senator BYRON DORGAN (Democrat, North Dakota): As a national policy, there's no question that there should be much more conservation in this country, but at least in the short run here, what happens is the American consumer is stuck with prices that are outrageous, that are windfall and excess profits for the oil companies. My action would be to capture some of these windfall profits and use them to make rebates back to consumers who are paying the extraordinary prices.

HORSLEY: According to the Energy Department, gasoline prices on the Gulf Coast yesterday were nearly 7 cents higher than they were a week ago. That helped raise the national average price by about 2 cents. The Federal Trade Commission is on the lookout for price gouging, but it's sometimes hard to distinguish gouging from legitimate price hikes caused by an actual shortage of gasoline. Associate General Counsel John Seesel of the FTC says he's seen no sign that anyone's withholding gas in order to drive up the price.

Mr. JOHN SEESEL (Federal Trade Commission): I'm certainly not personally conversant with every detail of what every company is doing at every refinery, but it looks like people are trying quickly to get things back online and producing.

HORSLEY: In fact, Exxon is bringing in additional fuel trucks from as far as California and New Jersey to help distribute gas in the Houston area. Still, some critics argue that over the longer term, consolidation in the oil industry has limited the nation's refining capacity, but Seesel says overall capacity has actually increased in recent years.

Mr. SEESEL: What has happened is that a number of fairly small, inefficient and high-cost refineries were closed, and a number of existing refineries were enlarged and made more efficient.

HORSLEY: As the last few weeks have reminded us, though, much of that refining capacity is now concentrated along the vulnerable Gulf Coast. President Bush says the hurricanes have shown how fragile the balance is between America's supply of energy and its demand. Scott Horsley, NPR News.

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