WASHINGTON – As soaring oil prices have frustrated drivers and slowed the economy this summer, President Bush and Democratic rival John Kerry are pushing competing comprehensive energy plans, suggesting that they have sweeping answers that will ease America’s reliance on foreign oil and bring down prices.

But energy analysts say the problems underlying the price surge are so deep, and so tied to complex, far-ranging supply-and-demand issues, that neither the Bush nor the Kerry plan would likely provide relief for the foreseeable future.

In essence, there may be little a president or Congress can do in the short term to lower energy prices, other than point the nation in the right direction with a payoff years away.

That’s because world energy consumption has grown at a dramatic pace in recent years, as populous, industrializing countries such as China and India have begun using more oil, jacking up the world’s thirst for oil to unprecedented levels.

At the same time, the capacity of U.S. refineries to make gasoline is stretched to the limit, so they cannot easily produce more.

The so-called fear factor – the threat of a disruption in oil supplies in volatile areas such as Iraq, Russia and Venezuela – also has played a key role in recent record-shattering price increases. But analysts said the real problem is that the world oil market is extremely tight, and it is expected to remain so.

On Friday, both campaigns, sensitive to voters’ growing anxiety about oil prices, again overtly tied their plans to this summer’s high gas prices. The Bush team has insisted that the administration’s energy plan, which Congress late last year did not pass, would help solve the problem.

“We called for the passage of a comprehensive energy plan more than three years ago,” said White House press secretary Scott McClellan. “The president remains concerned about rising energy prices and the impact those prices have on families and workers. It’s for this reason, now, that the president (since) Day One of this administration has been working to pass a comprehensive energy plan.”

Meanwhile, the Kerry campaign issued a statement accusing Bush of “standing still while oil prices skyrocket” and touting the “Kerry-Edwards plan to lower gas prices, improve efficiency and create energy independence.”

Both candidates say their plans would reduce America’s reliance on foreign oil and make the nation less dependent on the volatile Middle East – Bush largely by promoting domestic oil production and Kerry by emphasizing conservation. While there is some debate whether either plan would accomplish what it promises, analysts say that at best each would take many years to achieve its goal.

The key petroleum element of Bush’s energy plan is opening Alaska’s Arctic National Wildlife Refuge for drilling, but Democrats have blocked energy bills containing this proposal because of what they see as the area’s environmental sensitivity. Polls suggest the public also has reservations about drilling in the Alaskan refuge.

In the unlikely event that this area’s oil is tapped, it would take five years before the first drop was available, said Mary Novak, managing director of energy services for Global Insight, a consulting firm.

The GOP proposal also calls for tax incentives to spur more domestic oil production, but Novak dismissed the effectiveness of such tax breaks in the current climate. “What better incentive is there than $48 a barrel (of) oil?” she asked.

Vice President Dick Cheney, who headed the task force that produced the Bush energy policy, said the administration wants to expand refining capacity in the United States. But he said that an administration initiative to expand existing refineries by relaxing environmental rules is tied up in the courts.

Building refinery capacity takes several years, said energy consultant Phil Verleger, even if the environmental obstacles are overcome.

Kerry, meanwhile, has outlined steps he says would reduce oil prices in the short run, including diverting oil from the nation’s Strategic Petroleum Reserve. But Robert Ebel, director of the energy program at the Center for Strategic & International Studies, said he doubted that such a move would have a significant impact on oil prices.

“Even if we did tap the (reserve), the impact would be more psychological than anything else,” Ebel said, because it would at most add 125,000 barrels a day to the market when the U.S. is consuming 20 million barrels a day.

“And where do we refine it?” he asked. “And would the release of emergency oil simply replace foreign crude oil?”

Kerry also has proposed reducing the number of gasoline blends being produced in the U.S. to meet air-quality standards in different regions.

Novak said this idea would increase the efficiency of the gasoline market, but the payoff in prices would not be huge. “It would only be pennies” on the price of a gallon of gas, she said.

Kerry’s energy plan also aims to influence energy prices by engaging in “aggressive, effective diplomacy that would reduce tension” in volatile regions such as the Middle East and cut the “risk premium” for oil. This is more of a foreign policy goal than an energy proposal, and analysts said the diplomatic job would be difficult.

The Bush administration also has attempted to use diplomatic means to lower energy prices, with little impact so far. Saudi Arabia recently announced that it would pump more oil, but the price kept climbing. One reason: the shortage of capacity in the United States to refine it.

Bush also has been trying to press Russian President Vladimir Putin so that oil from major Russian oil company Yukos is not disrupted as a result of Putin’s effort to dismantle it.

Bush and Kerry not only have conservation elements in their energy plans, but they also would provide incentives designed to spur technological strides such as developing hydrogen-powered vehicles. Each also would provide incentives for producing alternative fuels, such as biodiesel and ethanol.

But analysts said significant production of alternative fuels would take time.

More broadly, most analysts said there is little evidence the public or politicians are willing to commit to the sort of reduction in energy use – or significant investment in new fuels and technologies – that would make a serious dent in U.S. dependence on foreign oil.

Paul Sankey, an oil analyst for Deutsche Bank, said the United States is an “intensive user of energy” that is paying what is in effect a “direct tax” to oil producers such as Saudi Arabia and Russia. He said a solution would involve raising energy taxes to induce conservation, in the process capturing revenue that could help reduce the deficit and pay for government programs.

“But it would be political suicide to raise taxes on energy,” Sankey added.


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