Bush: Offshore Drilling Will Have Psychological Impact

By David Nitkin, The Baltimore Sun

Jul. 15–WASHINGTON — President Bush acknowledged today that expanded drilling in coastal waters would have no immediate impact on oil supplies, but said greater exploration would “change the psychology” of global markets.

“I readily concede that, you know, it’s not going to produce a barrel of oil tomorrow, but it is going to change the psychology that…demand will constantly outstrip supply,” Bush said of his call to step up drilling off the coasts of California, Florida and other states.

“There is a psychology in the oil market that basically says supplies are going to stay stagnant while demand rises,” the president said. But offshore drilling and projects such as trying to extract oil from shale in western states would “send a clear message that the supplies of oil will increase” and lower crude oil prices, he said.

Speaking at his first news conference since April 29, Bush sought to make comforting comments about the economy a day after he lifted an executive ban on offshore exploration on the Outer Continental Shelf, and after his treasury secretary announced steps to bolster confidence in publicly traded mortgage giants Fannie Mae and Freddie Mac.

The president noted several times that it was a “difficult time” for American families, but said he remained optimistic that the economy would continue to grow. Some critics said the president appeared out of touch in February when he said he had not heard that gasoline was approaching $4 a gallon.

“I’ve heard of it now,” he said today, when reminded of his earlier statement. But he said that drivers shouldn’t expect a quick drop in prices.

“There is no immediate fix,” Bush said. “This took us a while to get into this problem. There is not short-term solution.”

The lifting of the executive ban on off-shore exploration has little practical effect, since Congress would have to pass a law removing statutory prohibitions. Democratic leaders oppose such a move, and House Speaker Nancy Pelosi has called Bush’s proposal a “hoax” that is “echoing the demands of Big Oil.”

Responding to a question, the president was reluctant to call on Americans to conserve energy during a time of fast-rising prices.

Consumers “are smart enough to figure out whether they’re going to drive less or not,” Bush said, adding that it would be “a little presumptuous on my part to dictate to consumers how they live their lives.”

But pressed on the issue, he said “I think people ought to conserve and be wise about how they use gasoline and energy, absolutely,” and also said people should turn down their air conditioners when not at home.

Bush said his administration’s proposals for Freddie Mac and Fannie Mae were important so “people have confidence in the mortgage markets,” but said the assistance would be temporary, and he rejected an idea for federal takeover of the two companies.

david.nitkin@baltsun.com

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