WATCHING WASHINGTON OUTCRY ABOUT PRICES

It should be obvious that U.S. product prices are increasing because Iraq's invasion of Kuwait and the ensuing embargo carved about 4 million b/d of oil out of world supply.

Sadly, it's not obvious to everyone.

Some groups' antipathy to oil companies still sends them in paranoid pursuit of skullduggery every time gasoline prices rise.

CRISIS 'SCAMS'

For instance, the National Association of Attorneys General met last week to discuss "surging gasoline prices and the re-emergence of energy crisis related scams." It urged the federal government "to examine comprehensively the entire petroleum industry, including the way spot market and commodity futures trading affect pricing."

It also said model price gouging laws and regulations should be prepared for consideration by state legislatures.

There was a hint of deja vu in all this. The attorneys general, many of whom aspire to higher political office, also were incensed after last December's exceptionally cold weather briefly drove up product prices. They launched an inquiry, but nothing came of it.

Also last week, the Petroleum Marketers Association of America said it will consider at its Oct. 7 annual meeting whether to seek federal legislation to ban refiners from operating retail service stations. That may be a new position for PMAA, but many of its members have sought divorcement at the state level for years.

Phillip Chisholm, PMAA executive vice-president said the actions of refiners since the crisis in the Middle East helped prompt the move.

He said, "By shifting the full burden of price increases to the wholesale level alone, refiners would have the public believe they are exercising 'restraint.' In fact, they are simply using marketers to subsidize their own retail operations, thus making it impossible for marketers to compete."

And last week a coalition of environmental and conservation groups opened fire on the oil industry, claiming the Middle East crisis is not a reason to increase U.S. oil production but to improve conservation and renewable energy.

Michael McCloskey, Sierra Club chairman, said, "The Bush administration and the oil companies are now trying to get the American people to believe that our country needs to sacrifice its public lands so that it can pump its way out of today's oil disruption."

Dan Lashof of the National Resources Defense Council said, "Except for oil companies, no one cares about oil per se. The goal of our energy policy response to the Iraqi crisis should not be narrowly defined as increasing domestic oil production, finding alternative energy supplies, or even increasing energy independence. Rather, we should seek to deliver the services provided by Middle East oil at the lowest cost to the nation as a whole, taking energy security, environmental quality, and equity into account."

'BAD IDEAS'

Marc Ledbetter of the American Council for an Energy-Efficient Economy said, "Now that we are on the verge of another major national debate on energy policy, we are about to be deluged with a lot of bad ideas for reducing our dependence on foreign oil. We know the bad ideas are coming because they thrive in times like these."

That concerns oil lobbyists, too. They are worried about rash energy policy decisions Congress may make between the time it reconvenes in early September and adjourns in October.