President Bush said there was no magic wand to wave to lower oil prices, but experts say there are simple steps he could take to lower the soaring price of crude. Here are some answers to questions about making oil cheaper.
Q What can Bush do?
A One step that could have an immediate impact would be to fill the Strategic Petroleum Reserve with heavier, sour crude oil. Right now, the SPR is being partly filled by light, sweet crude, which is lower in sulfur. This is the variety most sought by refiners and taking it off global markets and putting it into the reserve makes it more scarce, thus higher priced. About three-tenths of a percent of global supply of light, sweet crude is being diverted to the SPR.
Q What would this switch achieve?
A Philip Verleger, an oil industry analyst, said he thinks it could help lower the price of gasoline, and diesel fuel could fall by $1 a gallon.
Q Why would it make a difference?
A Heavy crude oil sells for a lower price globally. And it makes more light, sweet crude available and thus cheaper.
Q Could Bush suspend any other rules to ease prices?
A Congressional mandates for ethanol to be blended into gasoline effectively replaces about 4 million gallons of gasoline production, Verleger said. That reduces the amount of hydrogen, a byproduct, available for making low-sulfur diesel, which makes diesel more expensive. Temporarily relaxing ethanol rules could help lower diesel fuel costs.
Q Sens. John McCain and Hillary Rodham Clinton have suggested temporarily waiving the federal fuel tax. Would it help?
A It might give a little relief to consumers, but would presumably add to deficit spending and reduce funds for the Highway Trust Fund, which pays for infrastructure repair. And to the degree it drives gas prices down, Americans would drive more, which would reduce supplies and push up prices, said Len Burman, director of the Tax Policy Center, which is run by the liberal Brookings Institution and centrist Urban Institute.
Q Bush repeated his call that new U.S. refineries could be built on military bases. Why hasn't this happened?
A Most military bases are far from the source of oil production in the Gulf of Mexico and the pipeline infrastructure that leads from there. It isn't a real-world solution.
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