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U.S. Energy Chief Silent on Future of Gas Costs

Posted on: Sunday, 18 September 2005, 18:00 CDT

Sep. 17--U.S. Secretary of Energy Samuel Bodman repeatedly declined to forecast the future of gas prices Friday, estimations his spokesman says are not part of his job.

Bodman, who was at a prayer service at Frazer Memorial United Methodist Church with Gov. Bob Riley, declined to say if average gas prices would ever dip below $2 a gallon for regular unleaded.

"I don't make forecasts," he said. "I think, with time, the industry has the capability of responding, so we should see some reduction in oil prices but I wouldn't speculate as to how much."

His spokesman, Craig Stevens, said an independent agency within the Department of Energy, the Energy Information Administration, is charged with forecasting gasoline prices.

He said that agency predicts the national average for unleaded gasoline will drop to between $2.40 and $2.60 by the end of the year. The national average for unleaded gasoline is $2.96, the AAA reported Thursday.

Bodman's "job isn't to forecast gas prices, Steven said. "His job is to ensure there is a supply of petroleum in the market."

He said he knows of no energy secretary to have ever forecast gas prices, even given the increase that has plagued American travelers immediately following Hurricane Katrina.

Thomas Jones, who was filling up his car Friday evening at a gas station at the corner of Day Street and Interstate 65, found Bodman's response odd.

"For the secretary of energy to not know when or if prices will go back down, that's a little bit ludicrous," he said.

Gas prices spiked more than 20 percent nationwide in the aftermath of Hurricane Katrina, partly due to a series of Gulf Coast refineries that were taken offline.

Some experts say the days of paying less than $2 a gallon for regular unleaded may be over. The popularity of SUVs, the ever-increasing demand for oil, natural disasters and the war in Iraq have led to chronic -- and sometimes erratic --increases in fuel costs.

"The costs will continue to climb unless people either decide that they're not going use gas, or the refineries are expanded, but that can have environmental consequences," said David Ramberg, vice president for publications of Economic Insight, an energy consulting company based in Portland, Ore.

The average price of unleaded gasoline dipped two cents a gallon in Alabama on Friday, to $2.81. On Sept. 4, the price was $2.96.

Last year, it was $1.75, according to AAA Alabama spokesman Clay Ingram.

Ingram said many AAA members have noticed that after oil companies increase prices dramatically --in the wake of a hurricane, for example -- the trickle down is much slower and never seems to get back to pre-natural-disaster levels.

"A lot of people feel that has to do with the oil companies' taking hold of an opportunity to bump their prices up a bit by having their prices jump up for legitimate reasons," he said. "When they start to come back down, they don't come down as far because people (get) a little bit acclimated to higher prices."

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Source: Montgomery Advertiser

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