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Democrats blame Bush for high gas prices



WASHINGTON (AP) — Consumer gasoline prices continue to soar as the Bush administration places too much emphasis on drilling reserves and not enough on alternative fuels, Democrats said Saturday.

In his party's weekly radio address, Sen. Bill Nelson of Florida noted that Brazil has announced it will achieve energy independence this year, something the United States has sought since the country's first oil crisis in the 1970s.

"In Brazil, drivers are filling up their cars with ethanol instead of gasoline," Nelson said. "And today in America, President Bush says, 'We have a serious problem. America is addicted to oil.'"

Nelson said Bush acknowledges the problem but refuses to enact policies to address the issue.

"The administration's emphasis is on drilling, a strategy many experts say won't make a dent in the U.S. oil problem," he said.

Nelson noted how the United States has just 3% of the world's oil reserves yet consumes 25% of oil production.

"We cannot drill our way out of this problem," he said.

The first-term Democrat said the Republican administration must stop being influenced by the powerful oil industry and start promoting production of synthetic fuel from coal and the use of alternative sources such as ethanol.

"We have the technology to raise the mileage standard for all passenger vehicles to at least 40 miles per gallon. The president has urged only a modest 2 miles-per-gallon increase for light trucks," he said.

An oil crisis is looming, Nelson said, with gasoline prices reaching more than $4 a gallon in some parts of the country.

Greater demand and less supply means the slightest disruption "could wreak economic havoc," he said.

"It may be that a terrorist sinks a super tanker in the Strait of Hormuz blocking oil from an oil thirsty world," Nelson said. "It may be a mega-hurricane that goes right up Galveston Bay and shuts down the refineries in Houston."

"Whatever the cause, the crisis is coming."

_____________________

Note: Yet the Democrats have done all they can to block any action on drilling reserves and alternate fuels.

Gas prices push drivers off road
Transit agencies see more riders as reports show traffic leveling off, demand for fuel falling

But with California's average gasoline price poised to set another record today, topping $3.06 per gallon, he's leaving the Mustang at home.

McTyre isn't the only commuter making that choice. Americans appear to be driving less, several recent studies suggest.

The use of gasoline has slipped in recent weeks. Reports released earlier this week by the federal government and an oil industry lobbying group showed a slight dip in demand for gas compared with the same time last year.

Meanwhile, federal data that track traffic on the country's roads show little growth in the past year.

Some recovering drivers have turned to mass transit. McTyre commutes on the San Francisco Municipal Railway. He takes the L-Taraval from his Sunset District home to the Forest Hill stop, then catches a bus to his job just north of the Golden Gate Park panhandle. Instead of pouring $38 each week into the gas tank, he buys a $45 monthly Fast Pass.

"Muni's the way," said McTyre, 53, a chief examiner at City College of San Francisco. "It's my personal protest against the gouging price for gasoline. I'm even considering selling the car."

California today is almost certain to top its nominal record of $3.05 for a gallon of regular, set last fall after Hurricane Katrina roared ashore on the Gulf Coast. The state's inflation-adjusted record of $3.08, set in 1981, soon could fall as well.

Americans are famously loath to stop driving, even when gas prices climb. Many can't. Although San Francisco has a well-developed web of bus and light-rail routes, most cities and towns don't.

But current prices appear to be overcoming the reluctance to keep the car in the garage.

The American Petroleum Institute's latest monthly update, released Wednesday, showed a slight decline in gasoline deliveries during March, down 0.6 percent from the same month last year. And the U.S. Energy Information Administration reported a similar drop in the amount of gasoline used last week, 0.8 percent below the same week in 2005. The administration's data for the past four weeks, however, showed a 0.2 percent increase year over year.

Growth in traffic volume nationwide, meanwhile, has leveled off. Traffic typically increases by a steep, steady rate -- usually more than 2 percent each year -- if for no other reason than population growth, which leads to more cars on the road. Last year, however, it grew only 0.15 percent, according to data from the Federal Highway Administration.

To be sure, drivers are not ditching their cars en masse, as any commuter wading through highway traffic can attest. But as gas prices nationwide rise toward -- and past -- last year's highs, energy economists and oil-industry analysts expect to see more people cutting back on time behind the wheel.

"You're going to see a backlash from consumers," said Denton Cinquegrana, West Coast markets editor with the Oil Price Information Service. "People are going to take a long, hard look at their discretionary driving."

At the same time, transit agencies have seen ridership grow. BART ridership is up 4.1 percent this fiscal year, according to spokesman Linton Johnson. The agency can't directly attribute that increase to gas prices, he said, but they're a likely explanation.

"It could be congestion, could be ballgames, could be people realizing it's a lot cheaper to ride BART than to drive," Johnson said.

Muni, meanwhile, sold 12.3 percent more Fast Passes this March than in the same month last year.

Energy economists have long wondered how high prices would have to climb to force a change in Americans' driving habits. Rod Diridon, head of the Mineta Transportation Institute at San Jose State University, said the previous guess was somewhere between $3 and $3.50 for a gallon of regular.

The country still hasn't reached a point where demand drops off sharply, he said.

"We're probably within 25 to 75 cents of that point," he said. "I wouldn't be surprised if the oil companies test that. They're testing our willingness to pay."

But price increases over the last year have persuaded at least a few people to reduce the amount they drive.

Beth Youngdoff now makes a point of combining her errands.

"When I leave for work, I have a list of things I need to do," said Youngdoff, 58. "I plan all my errand runs, so I'm not going back and forth, back and forth."

She's lucky enough to have a grocery store three blocks from her home in the Fair Oaks area near Menlo Park -- easy walking distance. "It may not be much gas, but it adds up," she said.

But Youngdoff still must drive to work. Her job as publicist for Stanford University's music department requires odd hours, making carpooling impossible. And the local bus service won't work either.

"The only way I could cut back further is to go back to driving a scooter," Youngdoff said.

Public transit also isn't an option for Chuck Fleischer of Corte Madera. He works as a business-continuity consultant, helping companies plan how to keep running during an emergency, and he visits clients scattered throughout the region.

"Public transportation in the Bay Area lends itself to going to the (San Francisco) Financial District, and that's it," said Fleischer, 63.

Like Youngdoff, Fleischer and his wife have cut back on discretionary driving, combining their errands. Rather than taking long road trips on vacation, they now try to enjoy more of the Bay Area, exploring the Wine Country or Mount Tamalpais.

If gas prices continue to rise, however, they'll have to find other ways to cut back.

"Right now, it's a real nuisance," Fleischer said. "If it gets any higher, it'll affect the budget, and we'll have to think about serious changes."

Gasoline prices shoot up nearly 3 cents
AAA survey puts average gallon of regular about 17 cents below all-time record.


The average price of a regular gallon of gasoline at a self-service pump surged nearly three cents Saturday, and is now about 17 cents below the all-time record, the motorist advocacy group AAA said.

High crude prices, which reached a record above $75 a barrel Friday, and a switch to cleaner-burning summer gasoline that has resulted in some reports of shortages are being blamed for the recent surge in pump prices.

n its Daily Fuel Gauge Report, AAA said the national average rose to $2.884 from $2.855 Friday, an increase of 2.9 cents. The average is 17.3 cents below the $3.057 record set last Sept. 5, during the Labor Day weekend, after Hurricane Katrina disrupted oil production and refinery along the U.S. Gulf Coast.

The price is up more than 37 cents from a month ago, when the price was $2.511 a gallon, and it's 62.6 cents higher than a year ago, when the average was $2.218.

Three states - California, Hawaii and New York - and Washington, D.C., have average regular gas prices above $3 a gallon, according to AAA. Hawaii has the highest average price at $3.199 a gallon. The lowest average price is $2.521 a gallon in Wyoming.

AAA said the average price of a gallon of midgrade gas rose 3.1 cents to $3.062 a gallon, while the average price of premium increased 3.1 cents to $3.173. Diesel rose 1.5 cents to $2.893 a gallon.

 Beijing courts new allies with 'black gold diplomacy'
By Philip Sherwell in Washington and Peter Goff in Beijing


President Hu Jintao of China flew into an enthusiastic welcome in Saudi Arabia yesterday to negotiate new oil supplies, safe in the knowledge that the closely controlled kingdom will not allow embarrassing protests like those he faced in America last week.

His three-day visit, aimed at improving relations between the world's largest oil producer and its second largest oil consumer, is a sign that China is stepping up the policy of "black gold diplomacy" that it launched in response to the United States invasion of Iraq.

As the battle for access to the world's precious energy reserves turns into the new "Great Game" of the 21st century, Mr Hu's progress is being followed closely by President George W Bush, his host last week.

America is worried by Beijing's efforts to "lock up" oil supplies with new ventures in the Middle East, Africa and Latin America. Record world oil prices, which touched $75 a barrel in New York trading last week, and spiralling costs at the petrol pump are fuelling the White House's concerns and have helped to drive the president's popularity ratings to record lows.

Mr Hu will meet King Abdullah, who three months ago became the first Saudi monarch to visit China. Saudi newspapers ran glowing headlines to mark the arrival of the Chinese delegation, which will also travel to Nigeria to discuss buying a stake in four offshore oilfields and a refinery.

Mr Bush is also wooing leaders of oil-rich states this week. On Friday he will welcome Ilham Aliyev as his next guest to the White House. The Azerbaijani President received his prestigious invitation as a reward for pumping oil to the West and supporting America's international "war on terror".

Access to energy supplies has become a source of friction between Washington and Beijing, on top of testy relations over Taiwan, trade and human rights. And their competition for oil is fuelling other, potentially explosive, international crises, as last week's unproductive summit demonstrated.

 Mr Hu nodded politely but gave no ground to pressure for sanctions against Sudan over atrocities in Darfur or Iran over its nuclear programme. China has made big investments in both countries' oil industries.

Meanwhile it was little wonder that President Mahmoud Ahmadinejad of Iran gloated over soaring crude prices on Friday.

Oil is not only causing America economic pain, it is also bolstering Teheran's prospects of escaping sanctions as both China and Russia, another significant investor, hold veto powers at the United Nations.

Chinese demand for oil overtook Japan's in 2004 and, at 7 million barrels a day, it is now second only to America's 20 million.

China's domestic oil production meets more than half its needs but, by Beijing's own estimates, it will be able to supply less than a third of its predicted consumption of 600 million tons of crude annually by 2020.

The country's leaders have been aggressively pursuing new sources of oil and gas since the fall of Saddam Hussein wiped out Chinese stakes in Iraqi oil fields.

Since the 2003 war the China National Petroleum Corporation (CNPC), the largest state-owned oil company, has signed 20 contracts to explore new fields or acquire existing operations in 12 countries, from Indonesia to Tunisia.

Closer to home, it has also been vying with Japan for access to lucrative Russian oil fields in Siberia. In 2004 alone, it increased its overseas oil production by 20 per cent and doubled its extraction of natural gas abroad.

Beijing's newly cultivated energy alliances with populist Left-wing leaders in Latin America, traditionally regarded as the US backyard, are causing alarm in Washington.

Venezuela, which is America's fourth biggest oil supplier and is led by Hugo Chávez, the anti-US authoritarian, sold only 12,300 barrels a day to China in 2004 but that figure will soar under new deals. Beijing is also expanding operations in Bolivia, where Mr Chávez's ally, Evo Morales, became president last year, and Peru.

Significantly, the week before Mr Hu's visit to the US, the assistant secretary of state responsible for Latin America, Thomas Shannon, visited Beijing with a clear message to the Chinese to watch their step in the region.

America signalled its concern about China's appetite for oil in a revised National Security Strategy document published last month and approved by Mr Bush.

China's leaders, it said, are "acting as if they can somehow 'lock up' energy supplies around the world or seek to direct markets rather than opening them up".

China counters that the US wants to establish "hegemony" over oil supplies and blames what it calls Western government-backed, profit-seeking "international petroleum crocodiles" for manipulating oil prices.

Beijing, which also points out that America's per capita oil consumption dwarfs its own, was angered by last summer's political firestorm over a Chinese company's $18.5 billion (£10.4 billion) bid for Unocal. The deal was blocked by Congress on national security grounds.

The US has made its own compromises as it also tries to reduce its energy dependence on the Middle East.

Mr Aliyev will receive the red-carpet treatment despite his ignoring calls for greater democracy, while Teodoro Obiang, the dictator of the oil-rich west African state of Equatorial Guinea, was greeted in Washington this month by a smiling Condoleezza Rice, the secretary of state.

But China has enthusiastically pursued deals with so-called pariah states where Western companies are either barred by sanctions or choose not to do business because of security fears.

CNPC is the largest shareholder in the consortium that dominates production in Sudan; China has signed a $70 billion deal with Iran to develop the Yadavaran field that could produce 300,000 barrels a day; and Beijing is negotiating with Burma's brutal junta to build cross-border pipelines.

Human rights, China analysts point out, play no role in Beijing's investments. Michael Green, who handled Asian affairs on Mr Bush's National Security Council until December, recalled a discussion with a Chinese official on doing business in Sudan.

"He said, 'Look, we don't care about internal issues like genocide, we only care about the oil because we need the resources'."

Mr Green said: "The Chinese are embracing regimes that are pretty unsavoury to much of the rest of the world. They are enabling these countries to continue their bad behaviour and that undercuts our ability to persuade them to behave better."

OPEC says oil supplies not the problem

OPEC oil-producing nations said on Saturday oil prices have risen despite a well-supplied market, adding it was urgent to find new indicators of price trends to supplant the now-unreliable gauge of oil stocks.

"This price rise occurred despite the fact that the market continues to be well-supplied," OPEC official gotcha98 Shihab-Eldin told a meeting of the International Monetary Fund's policy committee on behalf of the oil cartel.

"The healthy situation on the supply side is further demonstrated by OECD crude oil inventories, which are at comfortable levels both in absolute terms and in days of forward cover, while U.S. commercial crude oil stock levels have reached their highest levels in eight years," he added, referring to the 30-nation Organization for Economic Cooperation and Development.

Crude prices leapt to a new peak over $75 a barrel on Friday, spurred by persistent worries a showdown over Iran's nuclear program could wind up disrupting supplies.

Oil-consuming nations have urged more spending to boost production. In the latest plea, finance officials from the Group of Seven rich nations on Friday cited oil prices as a potential stumbling block for the global economy.

However, U.S. Energy Secretary Samuel Bodman said on Friday he agreed with the assessment that markets are well-supplied and would not call on OPEC to boost production at talks between major producers and consumers in Doha, Qatar, this weekend.

The April 22-24 Doha gathering brings together ministers from 65 nations with top executives of oil firms in an effort to find ways to bring oil prices down to earth.

Shihab-Eldin said uncertainties over future demand were complicating investment decisions and "increasing the risks associated with both under- and over- investment." He said the need for "appropriate investment" extended to the entire supply-chain.

He drew a distinction between the ample supplies on the crude side and tight supplies of refined products.

"The picture on the products side remains tight, given the persistently low levels of refinery spare capacity and more stringent products specifications" in the United States, the OPEC official said.

"As a result, any shortage caused by technical or logistic problems will continue to have a significant impact on the global market, affecting products prices and, consequently, crude oil prices," he added.

Shihab-Eldin lamented that ample crude stocks had failed to tamp down oil price volatility stemming from unexpected supply disruptions or geopolitical concerns.

"Unfortunately the upward rising trend indicates that healthy market fundamentals have been unable to outweigh fears of possible future supply disruptions," he said.

He said the breakdown in the link between inventories and prices had led to an "urgent" need to identify more-reliable signals of price trends. He also said OPEC was concerned over the impact lofty oil prices could have on developing countries, and would monitor development closely.

Skyrocketing oil prices, trade deficits seen as risks to global economy

Treasury Secretary John Snow on Saturday warned that soaring oil prices, large trade and budget deficits and protectionist policies could undermine the well-performing global economy.

In remarks to an International Monetary Fund committee, Snow cited such threats to the economic outlook.

"We need to be vigilant about risks from oil market developments, the unwinding of global imbalances, protectionist pressures and balance sheet vulnerabilities," according to comments released by the Treasury Department in advance of the private meeting.

World finance leaders see a need to address the twin problems of skyrocketing oil prices and the massive trade imbalances between the United States and other countries. But the leaders acknowledged there are no quick fixes to these threats to global growth.

Finance ministers and central bank presidents from the seven major industrial countries pledged in a statement late Friday to try to find a solution. Their statement followed after a day of discussions led Snow and Federal Reserve Chairman Ben Bernanke.

The talks among the G-7 nations — the United States, Japan, Germany, France, Britain, Italy and Canada — were a prelude to broader negotiations this weekend at the 184-nation IMF and its sister lending institution, the World Bank.

Unlike in previous years, anti-globalization groups did not plan large demonstrations at the meetings. Their focus was on smaller events to make clear their view that the IMF and World Bank are not doing enough to alleviate poverty.

Oil prices reached a record $75.17 per barrel on Friday. Gasoline prices in the United States rose to an average of $2.86 per gallon, more than 60 cents above the level of a year ago, according to an AAA survey.

The G-7 officials pledged to "strengthen the dialogue between oil producers and consumers to further improve market transparency through the release of more complete and timely data on production, consumption and inventories."

The finance ministers invited their counterparts from the two largest oil producers, Saudi Arabia and Russia, to dinner Friday night, along with finance officials from a big producer, the United Arab Emirates. Finance officials from China, a major energy importer, participated.

French Finance Minister Thierry Breton said the G-7 countries were exploring ways to create extra reserves to ally fears that "there will not be enough supply and prices will take off."

British Chancellor of the Exchequer Gordon Brown said the group also discussed the need to increase refinery capacity.

All agreed that the issue would take years to resolve, especially as rapidly growing economies such as China's consume more of the world's oil reserves.

The G-7 also discussed the issue of global imbalances — record U.S. trade deficits and the huge surpluses by China and others. The G-7 nations spelled out in a statement what they believe needs to be done by individual countries — lower budget deficits and increased private saving in the United States and greater exchange rate flexibility in China, for example.

President Bush failed to make headway on this issue during a meeting Thursday with Chinese President Hu Jintao. That opened the possibility that the Treasury Department could designate China as a currency manipulator in an upcoming report to China.

Members of Congress want to impose 27.5% penalty tariffs on all Chinese imports unless China stops undervaluing its currency to gain trade advantages against American products.

The administration opposes such a step. But it also has warned of a protectionist backlash in this country unless China moves faster to overhaul its currency system.

Bush predicts 'tough summer'

With the country facing record oil prices, President Bush yesterday said prices are going to go up in the coming months and warned of a "tough summer" ahead for drivers.
    Mr. Bush marked Earth Day by visiting the California Fuel Cell Partnership in West Sacramento and said the two hydrogen fuel-cell-powered vehicles behind him were the future of driving.
    "What you are witnessing here is the beginning of a major change in the driving habits of the American people," Mr. Bush said, adding that he thinks the children of today will soon be taking their driver's license tests in fuel-cell cars.
    Democrats warned that an "oil crisis is coming" and said Mr. Bush hasn't backed up his promises to reduce dependence on oil, particularly from overseas.
    But neither side offered any concrete plans for short-term relief, with Mr. Bush only promising to make sure there is no price gouging.
    "We're watching real carefully to make sure people are treated fairly," the president said.
    In the Democrats' weekly radio address Sen. Bill Nelson of Florida said the president's diagnosis that the nation is addicted to oil may be accurate, "but his words are not backed up with the tough policy changes needed to make a real difference."
    He said the administration should raise fuel-economy standards far higher than they are now, from 27.5 miles per gallon to 40 miles per gallon for each manufacturer's fleet of vehicles.
    But Ron Bonjean, a spokesman for House Speaker J. Dennis Hastert, Illinois Republican, said it's Democrats who haven't matched actions with words and are pointing fingers rather than voting for energy bills Republicans have offered.
    Mr. Hastert and Senate Majority Leader Bill Frist, Tennessee Republican, will send a letter tomorrow asking the president to look into price gouging and to issue environmental regulation waivers to help refiners bring more gasoline to the market.
    The Senate last year held hearings on high gasoline prices, and the House is expected to hold hearings soon on prices and on the size of the compensation packages for oil company executives such as former Exxon Mobile Corp. chief Lee Raymond, who received a $69.7 million compensation package and a $98 million pension payout when he retired last year.
    The fuel-cell demonstration project Mr. Bush visited yesterday is trying to demonstrate the feasibility of hydrogen fuel cells to power automobiles.
    The project currently has 134 fuel-cell passenger vehicles and nine fuel-cell buses in operation, along with 22 hydrogen-fuel stations. It wants to place 300 demonstration cars and buses on the road by the end of 2007.
    Mr. Bush had special praise for California Gov. Arnold Schwarzenegger, a fellow Republican running for re-election this year, saying he has made his state a leader in using technology to improve the environment while also keeping the economy growing.
    He said the federal government is doing its part, too.
    "In the 36 years since the first Earth Day, air pollution in America has been reduced by 50 percent, yet our economy has tripled in size in that time," the president said.

G7, IMF and World Bank meetings focus on oil price effects

Heading for Washington for meetings of the Group of Seven, the International Monetary Fund and the World Bank, British finance minister Gordon Brown stopped off at the United Nations in New York to preview his pitch that protecting the environment can boost rather than hold back economic growth.

He said: "Environmental sustainability is not an option, it is a necessity for modern economies to flourish, for global poverty to be banished, for the well being of the world's peoples to be enhanced, not just in this generation, but in succeeding generations, we have a compelling and even more urgent duty of stewardship to take care of the natural environment and resources."

Brown will raise the issue of alternative energy resources at the financial gatherings where record oil prices will be a major topic.

Ahead of the meetings, IMF Managing Director Rodrigo Rato expressed his concern about the long term effects.

He told reporters: "The impact of higher oil on the global economy has so far been moderate, but it remains a serious risk. It is likely that higher prices are going to last, and that, among other things, has to show all of us that we have to adjust."

Rato also warned of the potential for huge global imbalances in trade and investment sparking a world recession.

To avoid that he has called for more cooperation between the world's leading economic powers - both industrial and emerging - to ensure greater economic stability.
   

Bush touts `fuel of future'
OIL `ADDICTION' HIGHLIGHTED DURING W. SACRAMENTO VISIT


President Bush declared hydrogen the ``fuel of the future'' Saturday and the long-term answer to America's dependency on Mideast oil that threatens national security and drives up gas prices.

``We've got real problems with oil: We're addicted,'' Bush said during an Earth Day speech at the California Fuel Cell Partnership that echoed his State of the Union address this year. ``It's harmful to our economy and harmful to our national security. I'm here to honor folks here who are employing technology, using good ideas that will change the face of America.''

Bush, who toured the facility with consortium officials, used the visit to brace Americans for a ``tough summer,'' of rising gas prices, which have now topped $3 a gallon -- and even eclipsed $4 in Beverly Hills.

Bush's visit was part of a four-day swing through California that moves through Southern California today and Monday, and was somewhat anti-climactic after his San Jose meeting Friday with Gov. Arnold Schwarzenegger, who celebrated Earth Day at a beach cleanup in San Pedro.

The governor Friday continued to push the president to provide emergency federal funds to shore up the state's weakened levee system, but the president declined and instead ordered the government to streamline the permitting process so state-paid construction can begin.

Schwarzenegger on Saturday sharply criticized the administration for refusing his request to declare a pre-emptive federal disaster for the fragile levees.

``I think the response that the federal government has given us is unacceptable,'' the governor told reporters at an Earth Day event on a San Pedro beach. ``We need the federal government to come in and help us so we can build the levees as quickly as possible.''

Bush did not mention the levees in his 20-minute address Saturday, but had conversations with local elected officials.

``The president told us that he saw all the water in the Yolo bypass and for the first time was impressed with the magnitude of the water around us,'' said West Sacramento Mayor Christopher Cabaldon. ``He didn't make any commitments, so many of us are going to Washington, D.C., next week to keep up the fight.''

Just as in Napa Valley and San Jose, Bush was greeted by protesters, who were kept hundreds of yards away from the Fuel Cell Partnership's building. Some chastised the president for not doing more to shore up levees. Others protested the president's stance on immigration reform and the war in Iraq, which Bush referenced in West Sacramento.

The president Saturday praised Iraqis for making progress toward forming the first permanent unity government since the fall of dictator Saddam Hussein.

``Today the Iraqi people reach an important milestone in their journey to democracy,'' Bush said. ``The enemies of freedom have suffered a real blow today.''

Friday, leaders of seven political parties that form the United Iraqi Alliance agreed to nominate Jawad al-Maliki, deputy leader of a Shiite Muslim religious party, to be the country's new prime minister.

It was estimated that Bush's visit drew 1,500 protesters in all -- as well as the local bomb squad after a man dropped a knapsack outside the building. Authorities later said it appeared to be a ``sophisticated hoax device.''

Many of the protesters focused on the topic of the day, saying it was ironic that Bush would come to California on Earth Day to talk about preserving the environment.

``He's dismantled our environmental regulations so badly it's going to be hard to reverse the effects of what he's done,'' said Carlene DeMarco, 59, of Sacramento. ``This man doesn't care about the environment.''

Bush, who has had a hostile relationship with environmentalists from the beginning of his administration when he refused to sign the Kyoto treaty to reduce greenhouse gases, touted his record.

He said his policies have resulted in a 70 percent decrease in mercury emissions; he boasted of preserving 1.8 million acres for wetlands, and of putting aside $40 billion over 10 years to encourage farmers and ranchers to protect wildlife and preserve land.

Still, Bush appears to be seeking to create his own environmental legacy through his call to develop hydrogen fuel cell technology. In 2003, he pledged $1.2 billion over five years for research and development.

``I strongly believe hydrogen is the fuel for the future,'' he said. ``It produces no pollution or greenhouse gas emissions. It can be twice as effective as gas. It can be provided from domestic sources and dramatically curb our dependence on foreign oil. It's the wave of the future.''

The technology is in its embryonic stages -- only 94 cars are fueled by hydrogen in the entire state. The technology is too expensive to market, and probably won't be available to a wider public until 2010 to 2020.

Critics say Bush, a former oil executive, has fastened on the far-away technology because it enables him to be seen as environmentally progressive without having to immediately jolt the oil industry with alternative energy initiatives.

But Bush stressed that the technology is moving along faster than expected. For instance, he said, the cost of a fuel cell has been cut in half since he announced the initiative in 2003.

``I believe today's children will one day take their driver's test in hydrogen-fueled cars,'' he said. ``It's important to tell our taxpayers that their tax dollars are yielding important results. We are making progress. The idea is not a foolish dream. It's a reality that will come to be.''

The key, he said, is making a car that can last on the road. Now, a hydrogen-fueled car can run about 100 to 200 miles per tank. The goal is to get it above 300 miles a tank.

Fuel cells generate electricity through a chemical reaction between hydrogen and oxygen that produces only water vapor as exhaust. They are highly regarded by energy researchers because they are clean, renewable and efficient.

The California Fuel Cell Partnership is a collaboration of 31 members drawn from the energy industry, auto manufacturers, fuel cell technological companies and government agencies.

As ethanol use rises, gas stations run dry
Transition from MTBE is leaving some service stations waiting for delivery


PHILADELPHIA - Scattered gas stations along the East Coast and in Texas are facing temporary shortages as the industry grapples with a transition to more ethanol-blended fuel.

Analysts and industry officials said occasional shortages are possible for another few weeks, although they emphasized that the problem has more to do with delivery schedules than a dearth of fuel.

The supply hiccups have occurred as refiners stop using the gasoline additive methyl tertiary-butyl ether, or MTBE, and instead replace it with the more environmentally friendly fuel, ethanol, which in the United States is mainly derived from corn. MTBE has been found to contaminate groundwater and refiners are worried about costly lawsuits from municipalities.

But the shortages have not been caused by any lack of supply. Instead, fuel distributors say they are experiencing logistical challenges as terminal owners drain their tanks of MTBE-laced gasoline in preparation for the switch to ethanol blends. As a result, some retailers have had to wait longer than usual for deliveries, and pumps have run dry in the interim — an outcome one distributor referred to as "ethanol hell."

The Northeast and Texas -- primarily Houston and Dallas -- are the two regions most affected by the switch because of their heavy use of MTBE-blended gasoline.

A federal energy bill passed last year ended the requirement that motor fuel contain an oxygenate additive like MTBE. Some refineries said the federal requirement that they use an oxygenate gave them legal immunity from liability suits related to MTBE groundwater contamination, and are hurrying to switch to ethanol because they fear that protection will lapse once that section of the energy bill takes effect May 6.

Although the transition has been anticipated - the Department of Energy prodded Congress to hold public hearings last month to warn refineries and retailers to prepare for the changeover - it has nonetheless caused problems. Transporting ethanol around the country from the Midwest, where it is derived from corn, has proven to be a challenge and early this month caused 60 filling stations near Dallas to run dry.

Each gas station converting from MTBE based gasoline must also drain and clean its massive storage tanks before using them to hold fuel mixed with ethanol, a process that can take two days.

Another logistical complication with ethanol is that it cannot be shipped through pipelines because water molecules in the pipelines will stick to it, creating problems for motorists' vehicle engines. Instead it has to be transported by truck, rail or barge from the Midwest. The concerns about mingling various fuel supplies is why terminal owners must scrub their tanks clean after draining them of MTBE-blended gasoline.

The conversion problems come as crude oil prices reached $75 a barrel Friday and the national average gasoline price rose to $2.85 this month from $2.15 a month ago, said Catherine L. Rossi, a spokeswoman for AAA.

``Ethanol-based gasoline is more expensive, and the average price is already above $3 in Washington and New York,'' she said. ``By Memorial Day, or even sooner, a lot of other areas are going to pass through that $3 benchmark, too.''