With gasoline prices up almost a dollar over 2004, most Americans say they’re feeling the pain. The president tells them to reduce demand.

The Wichita Eagle

WASHINGTON, D.C. — President Bush on Monday urged Americans to cut back on car trips amid warnings that the energy disruption from Hurricane Rita could be worse than
initially thought.

Bush said he would work with Congress to enact incentives for energy production and refinery construction. The president also said he was directing federal agencies to take steps to reduce energy consumption and that he would release oil from the Strategic Petroleum Reserve as needed to ease the shortages and price spikes caused by Rita and Katrina.

In Congress, Republican leaders announced plans to introduce legislation to give new tax breaks to energy companies and provide other incentives left out of the big energy bill Bush signed into law in August.

Although Rita spared massive refineries and chemical complexes in the Houston area, the first reports about damage to offshore production of crude oil and natural gas were grim.

“The early indication is that at least as many rigs are going to be impacted from Rita as Katrina. Rita went through an area of the Gulf where there simply were more mobile offshore rigs,” said David Kent, owner and editor of Rigzone.com, a Web site devoted to offshore oil production. “Rita cooled off once she got to shore, but she was churning out there for a while pretty viciously.”

Offshore production across the entire U.S. Gulf of Mexico remained closed Monday, meaning a fifth of the nation’s oil production has been shut down since Thursday. Even before oil workers evacuated offshore rigs in advance of Rita last week, Hurricane Katrina had knocked out 56 percent of Gulf oil production.

On-shore refineries also took a hit. The Energy Department said Monday that Katrina and Rita together had cut the nation’s refining capacity by 25 percent. Even when energy companies restart their Texas and Louisiana facilities, at least 10 percent of U.S. refining capacity will remain idle for weeks or months.

Bush issued his call for conservation after receiving a briefing on the energy outlook. He urged Americans to avoid unnecessary car trips and encouraged federal workers to use public transportation or join car pools. He directed federal agencies to curtail non-essential travel and to conserve electricity during peak hours when possible.

“We can all pitch in by being better conservers of energy,” Bush said during a visit to the Energy Department. “People just need to realize that the storms have caused disruption.”

The average price of unleaded fuel rose to $2.80 a gallon on Monday, up from $2.75 on Sunday, according to AAA. A year ago, a gallon of unleaded gas cost $1.89.

Bush sought to reassure Americans that he’s well aware of their pain at the pump. About two-thirds of Americans responding to recent polls say high gas prices are causing them financial hardship.

The president plans to travel today to the Texas towns of Beaumont and Port Arthur to get a better assessment of the damage to Gulf Coast refineries and other energy facilities.

Bush’s call for conservation, reminiscent of President Jimmy Carter’s plea for energy restraint in the late 1970s, was a striking shift in emphasis for a president who has tended to focus more on boosting production.

The White House said the Department of Homeland Security would extend a waiver, begun after Hurricane Katrina, of a federal law called the Jones Act so that foreign flagships could temporarily transport fuel from one U.S. port to another. The Environmental Protection Agency (EPA) was extending waivers relaxing gasoline-blending rules and diesel-fuel restrictions.

Bush said the storms had called particular attention to the need to increase refining capacity in the United States. He noted that no new refineries had been built since the 1970s, and said excessive federal regulation had discouraged oil companies from expanding existing plants.

Congress plans to move quickly this week on legislation aimed at providing incentives for refinery expansion or construction and provisions that are aimed at more energy production, especially of natural gas. Other bills would ease some air pollution requirements on refineries, open the Arctic National Wildlife Refuge in Alaska to oil drilling and allow states to override existing bans on natural gas drilling in coastal waters.

White House spokeswoman Dana Perino said the president wants to work with Congress to increase refining capacity and expand environmentally responsible oil and gas exploration, although the White House is still reviewing the new proposals that will be debated this week.

“We want to make sure that we do everything we can to help with the supply disruption,” Bush said.

Some consumer groups have accused oil companies of deliberately restricting refining capacity to keep gasoline prices high.

“They know when they make less gasoline, they make more money,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Los Angeles-based group that frequently battles oil companies in court.