EPA gas mandates take center stage in debate over higher fuel costs

June 29, 2000
Web posted at: 5:16 p.m. EDT (2116 GMT)

WASHINGTON (CNN) -- High gasoline prices and what lawmakers can do about them were the focus once more of hearings on Capitol Hill on Thursday, with Democrats again accusing the oil industry of price gouging, and Republicans blaming the hikes on poorly-planned Clinton administration policies.

"Recent, severe increases in gasoline prices in my state are, to say the least, baffling," said Ohio Republican Gov. Bob Taft, testifying before the Senate Committee on Government Affairs. "Our citizens are demanding, if not complete answers, at least some rational justification for this dramatic price increase."

The average cost of self-serve regular gas in the United States dropped to $1.67 a gallon this week, according to the Lundberg survey. However, prices have remained especially high in a handful of Midwestern states, topping $2 a gallon in many places. Fuel prices in Chicago recently spiked at $2.12, the highest in the nation.

Illinois Gov. George Ryan, a Republican, announced plans before the committee on Wednesday to suspend his state's gas sales tax later this week. Ryan, citing instances of residents crossing the state border with Indiana to fill up their tanks, said the measure was intended to prevent Illinois businesses from losing money.

Although Indiana Gov. Frank O'Bannon, a Democrat, recently suspended his state's gas sales tax, Taft told the committee he has no plans to follow suit, saying the tax revenues were needed for vital highway and public works projects in Ohio.

"I recognize that motor fuel production and distribution are very complex processes that are influenced by a host of factors," Taft told the committee.

But Ryan joined the chorus of calls from Midwestern lawmakers demanding that the Environmental Protection Agency suspend mandates requiring cleaner-burning gasoline in regions with poor air quality.

Democrats and Republicans continue to wrangle over the cost of the reformulated gasoline. Energy Secretary Bill Richardson told a House committee on Wednesday that the process to create the new blend of gasoline should add no more than eight cents per gallon to the price.

Assistant EPA Administrator Bob Persciasepe backed up those claims before the Senate Committee on Thursday. "Its about four to eight cents impact on cost of producing gasoline. We have no seen any evidence that the cost should be any different," he said.

State lawmakers sue EPA

But state lawmakers from the Midwest have questioned those figures, and have charged that the EPA failed to consider the price consequences before mandating the sale of the reformulated gasoline.

Wisconsin legislators traveled to Washington on Thursday to announce the filing of a lawsuit seeking the removal of the EPA mandates in their state. Wisconsin Assembly Speaker Scott Jensen said that the new gas requirements were costing consumers more than 25 cents a gallon in some areas.

Persciasepe gave little credence to the law suit.

"We'd generally view this one as a publicity stunt," he told a reporter before appearing at the Senate hearings. "There really isn't a lot of substance to their claim, and I think a lot of people are trying to do something because they're under pressure for gas prices."

Persciasepe said that the EPA does not have the jurisdiction to lift the mandates, which are part of the Clean Air Act passed by Congress. He also expressed doubt that a waiver would have any affect on gas prices.

Democrats, who have largely blamed the oil companies for the price increases, repeated claimed that since the EPA and the Federal Trade Commission have begun investigating possible price gouging tactics, the price of gasoline has dropped.

FTC Chairman Robert Pitofsky said Wednesday that the agency has already begun issuing subpoenas to refiners, pipeline operators and others in the production and distribution chain to try to determine if companies acted illegally in raising prices.

Taft and other Republicans have voiced support for the FTC probe, but nonetheless said that final responsibility for the high gas prices should fall on the shoulders of the Clinton administration, not the oil companies.

"The most fundamental reality is this: for a nation with an economy that is so heavily dependent on oil, we have no coherent energy policy to reduce our dependence on foreign oil or our vulnerability to rapidly escalating price spikes like this one," Taft said.