Can the Government Cap Rising Gas Prices?

This is a partial transcript from The O'Reilly Factor, March 9, 2004 that has been edited for clarity.

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BILL O’REILLY, HOST: American gas prices (search) approaching highest levels in the country's history. And nobody can explain why or at least they haven't. This could hurt President Bush big time in the election in November.

And joining us now from Orlando is Jeff Sundstrom, the director of public relations for AAA.

Mr. Sundstrom, why doesn't somebody in the government, the energy secretary, Spencer Abraham, somebody else, come out and say here's why prices are going up so fast? I haven't heard anything, have you?

GEOFF SUNDSTROM, AMERICAN AUTOMOBILE ASSOC.: Well, as you know, Bill, there are a number of reasons cited for the higher price of gasoline. We've had price spikes, you know, in each of the last four years, setting new records each year. And the usual list of reasons are predictable. High price of crude oil, low inventories, rising demand, etcetera. But no one wants to seem to want to talk about...

O'REILLY: All right. Let me stop you there, though. I want to walk through this like a stairs, OK? No. 1, have you heard any public official from the Bush administration say anything about this in the last month? Yes or no?

SUNDSTROM: Spencer Abraham -- yes.

O'REILLY: All right. Spencer Abraham said what?

SUNDSTROM: He said that the administration was very concerned about the high price of gasoline.

O'REILLY: OK, hey that was swell. Today he told us he didn't have time to make a statement. So they're concerned. But for four years under the Bush administration, I guess they've been concerned every time this has happened, right?

SUNDSTROM: Yes. And so was the Clinton administration.

O'REILLY: All right. So they were all concerned. And that's true. Under the Clinton administration, it went up, too. OK? But nothing was done to prevent it from happening again and again and again. Am I accurate there?

SUNDSTROM: That's correct.

O'REILLY: OK, good.

SUNDSTROM: That's absolutely correct.

O'REILLY: Absolutely. So once again, we the people getting hosed while the politicians are concerned. Now it looks to me, if I were a challenger to President Bush, I'd make this a huge, huge issue. Wouldn't you?

SUNDSTROM: Yes, but I think there's plenty of blame to go around, Bill. Really there seems to be a lack of political will to deal with something we call boutique fuels. And that is a system that has come into place over the last 10 years or so, where all different regions of the United States, there are state requirements, local requirements that specialty gasolines have to be used in the summer. What that's done is it's fractured the U.S. gasoline market up into protected markets and created shortages in various places, very high prices, when a pipeline is broken or a refinery has gone down and...

O'REILLY: So if anything goes wrong - I mean, so what this is is each state has a different standard for emissions. So each state has to get different gasoline. And sometimes even different cities have to get different gasoline. That's what you're saying, right?

SUNDSTROM: That's correct.

O'REILLY: All right. So you've got a balkanization of the whole system whereby Chicago is different than L.A., is different from New York. And everybody's going to buy in a very narrow margin. So if somebody leaves a valve open and all hell breaks loose, somebody gets hosed.

But the big thing is OPEC (search) keeps raising prices. I mean, they've raised their prices in the last month about 20 percent. Right?

SUNDSTROM: Well, OPEC keeps cutting production at a time when our demand is rising.

O'REILLY: OK, all right.

SUNDSTROM: So that's what's pushing up the price of crude.

O'REILLY: Right. That's what I mean by raising prices. They cut production so they know the barrel is going to go up. Right?


O'REILLY: OK. shouldn't our government be able to reason with OPEC because this hurts our economy, it hurts the world economy and then it goes back to OPEC? Why do they cut production? Why?

SUNDSTROM: Well, again, there are a variety of reasons why we're paying high gasoline prices...


SUNDSTROM: But the thing that AAA...

O'REILLY: OPEC, why are they cutting production?

SUNDSTROM: OPEC? I think there was some concern at the beginning of the year that oil prices were going to fall. Obviously that didn't happen. And we're now paying the price for that.

O'REILLY: All right, so they're greedy. They want more money and they're going to cut them again April 1, correct? Cut production again April 1?

SUNDSTROM: That is their current plan.

O'REILLY: OK. So we're going to get even more screwed because our government can't control OPEC. Now this has been going on for 40 years. You know, here's what I'm trying to tell everybody. Everyone knows the problem. OPEC and environmental regulations. We have to have environmental regulations. And we don't at all turn it into fuel. So we're dependent upon OPEC. But nobody solves the problem. And people don't have the extra money they have to pay, Mr. Sundstrom. And everybody's getting hosed here.

SUNDSTROM: Well, Bill, I think that we can meet our clean air goals as a society and also manufacture, or distribute a common blend of gasoline across the United States.

O'REILLY: But why don't we do it, then?

SUNDSTROM: Well, it looks like there's too many vested interests making money off of boutique fuels.

O'REILLY: OK, but that comes back to the government again to control this sort of thing. You know?

SUNDSTROM: Well, AAA's president said yesterday that we would like to see state and federal officials, both in Congress and the White House, sit down and make sense of this crazy...

O'REILLY: OK. I'm going to make a prediction now. If President Bush doesn't get re-elected, this is it. This is the reason. Because he's been in there for four years. Every summer, all the motorists get hosed. And I'm furious that these problems never get solved. And I'll make that prediction right now. If he doesn't get re-elected, it's because of gasoline prices. That's going to tilt it away.

Mr. Sundstrom, we appreciate your time. Thanks very much.

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