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ABOARD AIR FORCE ONE -- President Bush is trying to calm Americans' outrage over soaring gas prices by ordering an investigation into whether the price of gasoline has been illegally manipulated, his spokesman said Monday.

During the last few days, Bush asked his Energy and Justice departments to open inquiries into possible cheating in the gasoline markets, said White House press secretary Scott McClellan. Bush planned to announce the action Tuesday during a speech in Washington.

Bush is under pressure to do something about gas prices that have reached nearly $3 a gallon. In a new CNN poll, 69 percent of respondents said gasoline price increases had caused them personal hardship. Other polls suggest that voters favor Democrats over Republicans on the issue, and President Bush gets low marks for handling gas prices.

House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., urged Bush in a letter Monday to order a federal investigation into any gasoline price gouging or market speculation.

Senate Democratic leader Harry Reid of Nevada dispatched his own letter, calling for a multi-pronged approach to restrain gas prices. Among the steps were swift enactment of anti-price gouging legislation, an appeal to oil companies to refrain from further price increases; use of more alternative fuels and increased attention to existing fuel-saving laws and regulations.

Bush was working on the speech aboard Air Force One as he flew home Monday evening from a four-day trip to California that ended with a swing through Las Vegas. McClellan outlined part of the speech to reporters traveling on the plane.

McClellan said Bush also will announce that his attorney general and Federal Trade Commission will send a letter to all 50 state attorneys general, who have primary authority over price gouging, to remind them to stay on top of the issue and offer federal help to do so. And he will call on energy companies to reinvest their profits into expanding refining capacity, developing new technologies and researching alternative energy sources.

"I think you'll hear the president say very clearly that he will not tolerate price gouging," McClellan said.

Bush has consistently said that gas prices are high because global demand is rising faster than global supply and that the problem cannot be solved overnight. McClellan said Bush will talk about how experts predict that the price is expected to increase this summer and how the switch to a summer fuel mix is contributing to the problem.

Bush's actions are part of a four-part plan to address gas prices in the short- and long-term, McClellan said. The steps McClellan outlined are:

1. making sure consumers and taxpayers are treated fairly;

2. promoting greater fuel efficiency;

3. boosting gasoline supply at home;

4. aggressive long-term investment in alternative fuels.

Oil, Gas Prices Drop on Bush Supply Move



Crude oil and gasoline futures fell Tuesday after President Bush gave the Environmental Protection Agency the authority to relax regional clean-fuel standards to attract more imports of gasoline to the United States and to make it easier for supplies to be moved from one state to another.

President Bush also said he would halt deposits of oil to the nation's strategic petroleum reserve until the fall, but analysts said that measure would have next to no impact on crude prices and certainly would not help make gasoline any cheaper. Even the fuel-specification waivers will have a marginal impact, analysts said, given that the main force behind today's soaring pump prices is the near-record price of crude oil.

 "If you have $75 a barrel crude oil, you're sort of at a starting point of $2.90 a gallon for gasoline," said Mary Novak, managing director at the economic consulting firm Global Insight.

Light sweet crude for June delivery settled 45 cents lower at $72.88 a barrel on the New York Mercantile Exchange, dropping on the heels of a 4.48-cents-per-gallon decline in May gasoline futures, which finished at $2.1291 a gallon.

Analysts said a floor remains underneath oil prices, which are 33 percent higher than a year ago, for a variety of reasons:

_ With daily global demand roughly 85 million barrels per day, the world's oil producers have less than 2 million barrels per day of spare production capacity, and most of that is for Saudi blends of oil that are less ideal for manufacturing transportation fuels.

_ Oil traders are nervous about geopolitical tensions ranging from violence in Nigeria to the West's nuclear standoff with Iran to the move toward greater nationalization of natural resources in energy- rich Venezuela.

_ The global economy is expanding, and that means the thirst for oil is only going to grow.

_ Speculative investors are piling into energy markets as a way to profit from soaring prices and geopolitical turmoil that could potentially be bad for equities prices.

In a further escalation of the war of words between Iran and the West, Iran threatened Tuesday to begin hiding its nuclear program if the West takes any "harsh measures" against it _ Tehran's sharpest rebuttal yet to a U.N. Security Council Friday deadline to suspend uranium enrichment or face possible sanctions.

The United States, Britain and France claim Iran wants to use enriched uranium for nuclear weapons, not just electricity generation. Iran denies the charge, but Washington has been pressing fellow members of the Security Council to impose tough economic sanctions against Iran, which could affect its oil exports.

Nigerian exports are down because of violence there that prompted Royal Dutch Shell PLC to shut in 455,000 barrels per day of production, and more than 300,000 barrels per day of Gulf of Mexico output remains shut in as a result of damage from last summer's hurricanes. Also, Iraq's output has been hampered by continued sabotage of energy industry infrastructure.

Venezuela, another major oil producer, unsettled the market over the weekend by reasserting its intention to give the state greater control of oil fields being operated by foreign-owned oil companies.

Concerns about tight refining capacity and gasoline supplies in the U.S. ahead of the summer driving season are also propping up prices.

In the seven weeks ended April 14, gasoline stocks declined by more than 23 million barrels, according to last week's U.S. Energy Information Administration report.

In other Nymex trading, heating oil futures rose 2.64 cents to settle at $2.0581 per gallon, natural gas futures fell 30.4 cents to $7.254 per 1,000 cubic feet.

High gas prices propel a new 'moped madness'
Scooters and mopeds see a rise in sales - and cachet - thanks in part to a youth energy ethic.

ATLANTA – How it happened, Devin Biek still isn't exactly sure.

Infatuation with an Italian Vespa scooter led this resident of Elkhart, Ind., to an ad on eBay, a trip to Iowa, and a triumphant return with a 1978 Rizzato Califfo moped that wouldn't start. After its carburetor was de-gummed, the creature roared to life in a puff of blue exhaust.

Four years later, Mr. Biek is still hooked. "Once you ride one, you have to have one," he says. "It's consumed my entire life, and I have no real explanation for it."

The moped and its bigger, flashier cousin, the scooter, are swarming out of Jimmy Carter's America and into George W. Bush's republic - a movement propelled by soaring gasoline prices surpassing those of the late 1970s and by legions of Americans who take seriously the call for oil independence. If the serious intent is mixed with a little fun from "moped gangs" who call themselves the Heck's Angels or the Hardly Davidsons, so much the merrier.

Though Gen-Xers and baby boomers are among those flinging a leg over these two-wheelers, the vehicles may owe their newfound cachet to their embrace by a younger set. Sometimes called "the millennials," they are said to embody a sense of social purpose, adopt a "team" approach to life, and rebel from their elders by hewing to the small-scale. It's an attitude with a simple message: Small-bore is cool.

"This [moped resurgence] is a reflection of a deeper generational shift going on," says Neil Howe, a cultural historian and coauthor of "Millennials Rising: The Next Great Generation." "The idea of a big, bad, dangerous gas-guzzling machine is not the millennial style. They prefer something that is not only socially responsible in a big sense, but also in a little sense: It makes less noise, and it's less likely to get them into an accident."

Though mopeds have conquered most of the globe, their acceptance in the United States has sputtered, at best.

But places like Atlanta - a temperate, young-blooded city where travel through interconnected neighborhoods is safe, and where Euro cool is evident in clothing shops and restaurants - the small-bore engine is increasingly seen as a fun, practical choice.

Scooter dealer Bill Gornto knew he was onto something after hurricane Katrina, when some gas pumps around Atlanta read $9 a gallon and people came in "looking like zombies." He said he became a "scooter therapist," selling a record 20 scooters that week. "I almost felt guilty about it," he says, "but then people were telling me, 'No, man, you're doing a good thing.' "

Atlanta commuter Jeff Smith never really saw himself as a motorcycle guy. But four months ago he bought a used Vespa and soon purchased a second, larger one that's fast enough to take on the interstate. "I worried people were going to say, 'Why are you riding your girlfriend's bike?' " says Mr. Smith. "But instead people stop me every day and ask: 'What is it? How many miles to the gallon does it get? And how much does it cost?' "

To be sure, US sales of small-bore cycles aren't yet at their peak - 300,000 units in 1978. But sales are up 500 percent since 1999, and rose from 83,000 units sold in 2004 to 130,000 in 2005, according to the Motorcycle Industry Council. A new moped starts at $1,000, and fancy scooters go for more than $5,000. What distinguishes the scooter from the motorcycle is mainly its small-bore engine and small-diameter tires.

In fact, the tattered denim jackets and faux toughness of moped enthusiasts are boldly tongue-in-cheek, open invitations to small-bore envy. While the age of the average scooter owner has nearly doubled in the past five years to over 40, cultural experts credit mopeds' acceptance to the cachet of the kids, who often travel in packs.

The Creatures of the Loin gang out of San Francisco's rough-and-tumble Tenderloin District grew from 25 to nearly 100 since 2004. In Chicago's Ukrainian Village, the Peddy Cash gang, bundled in wool caps, often ride into the wee hours. The Moped Army was founded in Kalamazoo, Mich., and boasts about 300 members. The subject of a documentary film and a comic book, the Army draws about 10,000 regular visitors to its website. Its motto: "Swarm and destroy."

The "millennial" generation, born just as the moped faded from American roads in the early 1980s, is the vehicle's perfect arbiter, some experts say. Coddled and safety-conscious, it also has an unapologetic sense of civic awareness. "This is a generation that has no need to prove themselves by riding around on a big motorcycle on the weekends; they're already cool," says Ann Fishman, CEO of Generational Targeted Marketing Corp. in New Orleans.

So far, the moped remains a stranger in a land where a full-size truck is a top-selling passenger vehicle. Fatalities of moped riders have doubled since 1999, to 100 in 2005. But nonfatal accidents dropped over the same period, from 6,000 to 5,000, says the National Safety Council in Itasca, Ill.

To many riders, everything about the moped makes sense. "There's the price, the gas mileage, the whole retro thing, belonging to a unique group," says Biek. "Besides that, they're phenomenal machines."

Oil, Gas Firms May Face Tough Time in D.C.


WASHINGTON

The country's three largest oil and gas companies are expected to report combined first-quarter profits this week in excess of $16 billion, a 19 percent surge from last year that is sure to complicate life for the industry in Washington, where elected officials are scrambling for ways to assuage angry consumers and businesses.

President Bush on Tuesday gave the Environmental Protection Agency the authority to temporarily waive regional clean-fuel regulations to promote greater gasoline-supply flexibility, but members of Congress have other ideas. Some are renewing calls for a windfall profits tax and some want federal regulators to investigate industry consolidation. Still others are threatening hearings and expressing outrage at how the industry invests cautiously in new refining capacity yet rewards its executives lavishly.

 "These members of Congress are fit to be tied," said Paul Cicio, executive director of the Industrial Energy Consumers of America, a trade group concerned about the soaring cost of natural gas.

The combined earnings expected from ConocoPhillips, Exxon Mobil Corp. and Chevron Corp. will be 14 times greater than the combined first- quarter profits of Google Inc., Apple Computer Inc. and Oracle Corp.

"That level of profit is not justifiable," said Tyson Slocum, a consumer advocate and energy expert at Public Citizen.

But with world oil prices trading around $72 a barrel, analysts say full-year profits for the oil majors are likely to surpass the record- setting earnings of 2005, when Exxon reported a $36.13 billion profit _ the highest ever for a U.S. company. In other words, the hand- wringing in Washington isn't likely to mellow anytime soon. Still, this hasn't dampened investors' enthusiasm for energy stocks.

Shares of Exxon Mobil, Chevron and ConocoPhillips are all trading near the upper end of their 52-week range.

BP PLC on Tuesday reported a $5.6 billion first-quarter profit, though that was down almost $1 billion from the year before in part because of lost gasoline output from a refinery damaged by Hurricane Katrina. In a sign of just how much money stands to be made on the refining side of the business these days, Valero Energy Corp., the nation's largest independent refiner, said Tuesday its first-quarter profit jumped 60 percent to $848 million.

"The first quarter will be strong, but the way things are going, the second quarter is going to be phenomenal for these companies," said oil analyst L. Bruce Lanni of A.G. Edwards & Sons.

Lanni and other Wall Street analysts said the most likely fallout for the industry in Washington is more bad publicity in the form of hearings and investigations. But some policy experts say there is growing pressure on Congress to deliver more than just speeches given that pump prices are around $3 a gallon for the second year in a row and elections are in November.

Henry Lee, director of the environment and natural resource program at Harvard's Kennedy School of Government, said Democrats and Republicans alike feel enormous pressure from constituents to take some kind of action to lower fuel prices. At the same time, they recognize their relative powerlessness to have any major short-term impact on oil prices, which are up 33 percent from a year ago because of supply disruptions in Nigeria, the West's nuclear standoff with Iran and speculative fervor on Wall Street for all commodities.

So, Lee said, they are left with two types of options: punitive actions such as a windfall profits tax and creative measures to help balance energy supply and demand for the long-term, whether that means raising automobile fuel-efficiency standards or additional funding for alternative fuels research.

Rep. Joe Barton, R-Texas, said more hearings are necessary to determine how oil companies invest their profits. Sen. Arlen Specter, R-Pa., said a windfall profits tax may be necessary and that any future consolidation in the industry deserves more scrutiny. Sen. Charles Schumer, D-N.Y., has asked the Federal Trade Commission to monitor refiners this summer.

"These are all bad ideas," said John Felmy, chief economist for the American Petroleum Institute, the oil industry's main trade group.

Felmy said taxing oil company profits would be a "disaster," and asked "how does that help supply?"

The consternation in Washington about persistently high energy prices and soaring industry profits is not simply a matter of looking out for the little guy, analysts said. With mid-term elections coming up in November, members of Congress must also look out for themselves.

"They hear it when they go back home" to their districts, said Richard Semiatin, an assistant professor of political science at American University. "And they're getting an earful right now."

But Andy Weissman, an energy analyst at FTI Consulting in Washington, said members of Congress would be making an unfortunate mistake if they were to attempt to curry favor with voters by holding public hearings and lashing out at short-term oil industry profits rather than working behind the scenes on genuine solutions to the country's energy crisis.

"It's not going to make us better off in any fundamental way five years from now if there is a windfall profits tax on producers and it could hurt if it discourages production," Weissman said. "What is going to matter is a plan for reducing consumption and adding supply, and I think Congress has so far failed to live up to that."

Bush Eases Environmental Rules on Gasoline


WASHINGTON

President Bush on Tuesday ordered a temporary suspension of environmental rules for gasoline, making it easier for refiners to meet demand and possibly dampen prices at the pump. He also halted for the summer the purchase of crude oil for the government's emergency reserve.

The moves came as political pressure intensified on Bush to do something about gasoline prices that are expected to stay high throughout the summer.

 Bush said the nation's strategic petroleum reserve had enough fuel to guard against any major supply disruption over the next few months.

"So, by deferring deposits until the fall, we'll leave a little more oil on the market. Every little bit helps," he said.

Wholesale gasoline futures prices for June delivery dropped 8 cents a gallon to $2.10 on the New York Mercantile Exchange immediately upon Bush's remarks.

Easing the environment rules will allow refiners greater flexibility in providing oil supplies since they will not have to use certain additives such as ethanol to meet clean air standards. The suspension of oil purchases for the federal emergency oil reserve is likely to have only modest impact since relative little extra oil will be involved.

The high cost at the pump has turned into a major political issue, with Democrats and Republicans blaming each other for a problem that is largely out of Congress' control. Republicans are worried that voters paying more than $3 per gallon would punish the party in power. Democrats want to make that happen.

Democrats sought to turn gas prices _ like Hurricane Katrina and the Iraq war _ into an issue that hurts Bush's standing with voters. "What happen to Iraq oil, Mr. President? You said Iraqi oil would pay for the war. Ain't seen no money. Ain't seen no oil," Sen. Barbara Mikulski of Maryland said.

"Families are gripped by the fear of rising gas prices," she added.

At the same news conference, New Jersey Sen. Bob Menendez proposed a 60-day suspension of the gasoline tax, saying the money could be recovered by repealing tax breaks for energy companies. He scoffed at Bush's call to curb tax breaks for the oil companies.

"What we're left wondering today is why it took five years" for Bush to support tax increases on the energy industry, Menendez said.

Bush, in his speech, urged Congress to revoke about $2 billion in tax breaks over 10 years that Congress approved and he signed into law to encourage exploration. "Taxpayers don't need to be paying for certain of these expenses on behalf of the energy companies," Bush said.

He also urged lawmakers to expand tax breaks for the purchase of fuel- efficient hybrid automobiles.

The president said Democrats in the past have urged higher taxes on fuel and price caps to control fuel expenses, but he said neither approach works. Instead, he called for increased conservation, an expansion of domestic production and increased use of alternative fuels like ethanol.

Bush said high energy prices are disturbing.

"Our addiction to oil is a matter of national security concerns," the president said in a speech to the Renewable Fuels Association, which advocates alternate energy sources. "After all, today we get about 60 percent of our oil from foreign countries. That's up from 20 years ago, where about 25 percent of our oil came from foreign countries."

Bush said gasoline prices are expected to remain high throughout the summer and "that's going to be a continued strain on the American people."

Bush said the Federal Trade Commission, the Justice Department and the Energy Department were investigating whether the price of gasoline has been unfairly manipulated. The administration also contacted all 50 state attorneys general to offer technical assistance to urge them to investigate possible illegal price manipulation within their jurisdictions.

During the last few days, Bush asked his Energy and Justice departments to open inquiries into whether the price of gasoline has been illegally manipulated.

It's unclear what impact, if any, Bush's investigation would have on prices that are near or at $3 a gallon or more. Asked if Bush had any reason to suspect market manipulation, White House press secretary Scott McClellan responded, "Well, gas prices are high right now, and that's why you want to make sure there's not."

The administration sent letters Tuesday to state attorneys general urging them to vigorously enforce state law "against any anticompetitive, anticonsumer conduct in the petroleum industry."

"Consumers around the nation have expressed concerns about what they have perceived as anticompetitive or otherwise unfair conduct by the world's major oil companies," said Attorney General Alberto Gonzales and Federal Trade Commission Chairman Deborah Platt Majoras. Their letter said federal agencies had substantially increased efforts to monitor, detect and prevent any violations of the law.

House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., urged Bush in a letter Monday to order a federal investigation into any gasoline price gouging or market speculation.

"There is no silver bullet," Frist said Tuesday on ABC's "Good Morning America," but "we need to make sure that any efforts at price-gouging be addressed and addressed aggressively." Meanwhile, Frist said, consumers should take steps to conserve gasoline _ drive at slower speeds, tune up car engines for maximum efficiency and carpool.

Senate Democratic leader Harry Reid of Nevada dispatched his own letter, calling for a multi-pronged approach to restrain gas prices.

Lithium-Battery Cars May Deliver 300 Miles Per Charge



A company may soon offer American motorists a new option to save on high gas prices -- vehicles powered by lithium batteries, according to a Local 6 News report.

"The kind (of batteries) that power your cell phone may power your car in the future," Local 6's Jacquie Sosa reported.

A full version of a lithium-powered vehicle will be sold by Hybrid Technologies.

"Just plug in these cars for about five hours or so and you'll get about 300 miles on a single charge," Sosa said.

The cars can travel up to 100 mph, according to the report.

The vehicles cost about $35,000 or about double what buyers would pay for a gas-powered model.

Richard Griffiths is the driving force behind Hybrid Technologies' effort to make practical lithium-powered electric vehicles.

"We can take basically any vehicle and adapt it to fit, we basically can take any model and put a lithium motor, and so it really comes down to what the market is looking for," Griffiths said

Hybrid Technologies is the only U.S. company that sells the lithium-powered cars, the Local 6 News report said.