White House to release petroleum reserves

updated 3:35 p.m. ET Aug. 31, 2005

WASHINGTON - President Bush raised the possibility Wednesday that Hurricane Katrina will lead to even higher gasoline prices and shortages in some areas, even as his administration moved to release oil from an emergency government stockpile and to temporarily ease pollution standards on gasoline and diesel fuel.

“Our citizens must understand the storm has disrupted the capacity to make gasoline and distribute gasoline,” Bush said in a Rose Garden speech after meeting with top officials to discuss the crisis.

“A lot of crude production has been shut down because of the storm,” Bush said after returning from his Texas ranch to oversee federal relief efforts. He flew over some of the affected area on his way.

The decision to tap the Strategic Petroleum Reserve was an effort to keep production of gasoline and other fuels steady.

Even so, gasoline prices leaped nationwide as the extent of damage to the nation’s oil-distribution network became more apparent. Key refineries and pipelines remained out of service, reducing fuel shipments to retailers.

Tapping the government reserves will “certainly help those companies and those refineries to function, whereas they wouldn’t be functioning without a supply of crude oil,” Energy Secretary Samuel W. Bodman told The Associated Press in an interview.

Moments after Bush’s speech, Sen. Charles Schumer, D-N.Y., said the president’s actions do not go far enough. “On energy, Americans were expecting a lot more from the President. He took a tiny baby step when a giant step is required,” said Schumer, who contends Bush needs to release enough oil from the reserve to flood markets and drive down prices.

Rising gasoline prices have taken a political toll on Bush, helping to drive down his approval ratings to an all-time low.

The oil reserves — about 700 million barrels of crude oil stored in underground salt caverns in Texas and Louisiana — were last tapped in September-October 2004 during disruptions caused by Hurricane Ivan.

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