President Bush stresses need for more refinery capacity

By the OGJ Online Staff

�President George W. Bush said Monday the US needs to develop more refining capacity to prevent future product shortages.

Bush made the remarks following a meeting with his National Energy Policy Development Group, an interagency task force headed by Vice Pres.-Richard Cheney.

Bush said, �It is clear from first analysis that demand for energy in the US is increasing, much more so than production is. And, as a result, we're finding in certain parts of the country that we're short on energy. And this administration is concerned about it. And we will make a recommendation to the country as to how to proceed.

�But one thing is for certain, there are no short-term fixes; that the solution for our energy shortage requires long-term thinking and a plan that we'll implement that will take time to bring to fruition. It not only includes good conservation, but as well, exploration for oil and gas and coal, development of energy sources that exist within our 50 states.�

Reporters asked Bush if the Organization of Petroleum Exporting Countries� decision Saturday to decrease production 1 million b/d reflected a failure of US diplomatic overtures.

Bush replied, �The OPEC nations are responding to decreased demand. World demand, they think, is going to decrease and, therefore, they've responded with a million-barrel cut.

�The piece of good news in their decision was that the Saudi minister made it clear that he and his friends would not allow the price of oil, crude oil to exceed $28/bbl. That's very comforting to the American consumer, and I appreciate that gesture. I thought that was a very strong statement of understanding, that high prices of crude oil will affect our economy.

�Having said that, it's important for American consumers to understand that if we have a price spike in refined product, it's not going to be because of the price of crude oil being at $25 or $26/bbl. It's going to be because we don't have enough capacity, refining capacity�we're not generating enough product. And that's another issue that we'll be dealing with, is how to make sure we can get refined product to our consumers.�

The President also was asked if the OPEC production cut would impact gasoline prices this summer.

He replied, �We don't think so. We think that the major�the major impact on gasoline prices, if they go up, is a result of not generating enough supply, enough refined product to meet the demand of US drivers. And we haven't built a refinery in 25 years in America. We're not generating enough gasoline to meet demands. It's the same as natural gas. We're not exploring for enough natural gas to meet demand; we're not building enough power generating plants to meet demand, and we're beginning to pay the price for it.�

Bush was asked if the US would release crude from the Strategic Petroleum Reserve to ease gasoline supply problems in the summer.

�We've been through that before,� he said. �The SPR is meant for a national emergency�. The energy crunch we're in is a supply and demand issue. And we need to reduce demand and increase supply. The best public policy is to understand that, and that's what we're going to do.�

He added that the US would work closely with Canada and Mexico regarding energy supplies.

�A good energy policy is one that understands we've got energy in our hemisphere and how best to explore for it and transport it to markets.�

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