With gas prices on the rise, President Bush on Tuesday offered suggestions for reducing oil costs, including increasing refinery capacity and conservation, to diversify away from oil through the use of alternative fuels like ethanol.

Under pressure from lawmakers and the public who have alleged price gouging by oil companies, the president also said he has ordered a probe of price manipulation and market speculation. On Tuesday, he also ordered a temporary halt of deliveries to the Strategic Petroleum Reserve.

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The reserve is an underground storage facility where the United States keeps about 90 days worth of oil, or 685 million barrels, in case of a catastrophic event like an oil embargo or natural disaster. The president is not expected to withdraw any reserves from the SPRO.

"Our strategic reserve is sufficiently large enough to (protect the U.S.) against any disruptions in supply in the coming months ... every little bit helps," Bush said in a speech to the Renewable Fuel Association in Washington, D.C.

Bush is considering an array of actions that could help reduce the price of oil, including granting waivers on environmental rules in communities where gas is difficult to get.

In an effort to appease congressional leaders who suspect the oil companies are unfairly raising prices, the president said he asked his Energy and Justice departments to open inquiries into whether the price of gasoline has been illegally manipulated.

Republicans who control Congress have become concerned that the high cost of filling up could become a problem for them in the November elections. Polls suggest that voters favor Democrats over Republicans on the issue, and Bush gets low marks for handling gasoline prices.

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.

Bush noted that the state attorneys general have primary authority over price gouging and said Gonzales and the FTC will make sure they stay on top of the issue.

"Given the importance of energy to Americans' everyday lives and to the American economy, we have substantially increased our efforts at the federal level to monitor, detect, pursue and prevent any violations of the law in this industry," they said in the letters.

In the president's speech Tuesday, he offered a four-part plan aimed at putting a halt on the rise in prices, which are near $3 a gallon nationwide. The impact of closing the petroleum reserve on prices is unknown.

Bush called for greater fuel efficiency, though not an increase in the corporate fuel economy standards which are set by law. As he has in the past, he called on Americans not to drive when they don't have to.

Bush also asked oil companies to reinvest some of their record profits in new refineries. Bush has rejected calls for a windfall profits tax on oil companies. Instead, he said Congress should make it easier for oil companies to alter their refining plants without having to wait years for approval. No new refineries have been built in this country in 30 years, and a number of refineries were closed in the 1980s. That needs to change, he said.

He also called for increased domestic oil production, including drilling in the Arctic National Wildlife Refuge, something he's pushed for since he took office, but which Congress has so far refused him. Ironically, Congress approved drilling in ANWR during the Clinton administration, but President Clinton vetoed it.

The president won applause from his audience by saying that alternative fuels need to be harnessed and the use of gas should be reduced.

"Technology is the way really to help us, to change America for the better," Bush said, suggesting that alternatives like ethanol, bodies and hydrogen fuel cells need to be exploited.

"We're close to technology that will make it possible to drive 40 miles on electricity alone," Bush said. "A lot of drivers that are going back and forth to work in big cities won't use gasoline" with this new technology, he said.

On a separate price-gouging issue, Congress already has directed the FTC to investigate whether businesses used Hurricane Katrina to manipulate gasoline supply and prices. The commission is working to meet a May 19 deadline for its report to Congress.

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.

"We catch them gouging, we catch them in unfair trade practices, we'll deal with them in the federal government. That's what you expect the federal government to do," Bush said Monday night at a fundraiser for Rep. Jon Porter in Las Vegas.

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.

The Associated Press contributed to this report.

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