Hastert says administration misled public on high gas prices EPA spokesman accuses House speaker of playing politics

Saturday, July 15th 2000, 12:00 am

By: News On 6

WASHINGTON â€“ Ramping up an already hot campaign issue, House Speaker Dennis Hastert accused the Clinton administration Friday of misleading the public about what caused gas prices to soar in the Midwest. The administration denied the charge.

Mr. Hastert alleged that Vice President Al Gore and others suggested price gouging by oil companies was to blame even though they had a memo from a top Energy Department official that said other factors were responsible.

"Nowhere does this document indicate, or imply, that price gouging was a factor; nor has any other study or investigation," Mr. Hastert, R-Ill., wrote to Environmental Protection Agency Administrator Carol Browner.

"Yet you continued to point the finger at anyone other than where the responsibility truly lies. I certainly hope that this was not a coordinated strategy by [EPA], the Department of Energy and the vice president's office."

An administration spokesman dismissed Mr. Hastert's allegations.

"They are unfortunately just playing politics with gas prices, which we think is unconscionable," EPA spokesman Dave Cohen said. "What we have said on this from day one has been entirely consistent."

Gas prices increased throughout the country this spring but soared far above the rest of the nation in Chicago and Milwaukee starting in May â€“ angering motorists and their representatives in Congress. It also set off a series of attacks between Mr. Gore and his Republican rival for the presidency, Gov. George W. Bush.

Republicans blamed the price rise mostly on stricter EPA pollution-reduction rules that took effect this summer in the nation's smoggiest cities and the complications of producing reformulated fuel in the Midwest, where ethanol is used to make gas burn cleaner. They also criticized the Clinton administration for pursuing an energy policy that they said thwarts domestic oil production.

Democrats, meanwhile, noted huge campaign contributions to Republicans and Mr. Bush from the oil industry, and said price-fixing, not environmental regulations, was more likely responsible for the high prices. They acknowledged that the EPA rules likely were responsible for part of the price rise, but only 4 to 8 cents per gallon.

At their peak last month, prices in Chicago reached $2.33 a gallon â€“ 65 cents per gallon over the already high national average.

On Friday, Mr. Hastert distributed a June 5 internal memo from Energy Department acting policy office director Melanie Kenderdine assessing gasoline supplies in the Milwaukee and Chicago areas.

The document concluded "sufficient supply is available to meet overall demand at this time" in the Milwaukee and Chicago markets. But it also noted that a "very tight" supply was putting some pressure on prices there and meant that any disruptions could trigger shortages.

The memo attributed the situation to, among other things, low inventories of reformulated gasoline in the Midwest, the complexity of refining that blend, limited alternative supply sources and previous pipeline problems that interrupted deliveries.

"These supply issues will affect price, but the degree to which they contribute to price spikes is unknown," Ms. Kenderdine wrote.

Mr. Hastert contends the memo shows Mr. Gore, Ms. Browner and others knew the spikes were caused mainly by stricter pollution-reduction rules but blamed oil companies instead. In his letter, he accused Ms. Browner of intentionally misleading the public, as well as Midwestern lawmakers during two meetings last month.

After those meetings, Ms. Browner said federal officials determined there was no explanation for the dramatic difference between prices at Midwestern pumps and those elsewhere. The Federal Trade Commission then launched a continuing investigation into whether price-fixing was involved.