Evening Press Gaggle by Scott McClellan

Aboard Air Force One

En Route Andrews Air Force Base, Maryland

7:31 P.M. EDT

MR. McCLELLAN: I know there's a lot of interest in tomorrow's speech, and I wanted to come back here and do kind of a general preview of it for you all for tomorrow, which I think will be helpful for everybody. Tomorrow the President will focus his remarks on what we're doing to address high gas prices in the short-run, as well as what we're doing to eliminate the cause of high gas prices in the long-run. We have a strong economy, but high gas prices are like, as you have heard the President say, like an additional tax on families that are trying to live within a budget, farmers and small businesses. It puts a strain on working families and small businesses.

And the President will talk about why gas prices -- touch on why gas prices are high. He will talk about how global demand for energy is really rising faster than the global supply, because of countries like China and India, and he'll talk about how gasoline demand is only projected to increase this summer, and experts are projecting that gas prices will remain high through the summer.

And he'll talk about how we're switching from one fuel mix to another, transitioning from MTBE to ethanol in specialized fuel blends, and how that is temporarily pushing gas prices up even more, as well.

So tomorrow the President is going the lay out a four-point plan that he has for addressing high gas prices. Let me mention the four areas that he'll cover. First, making sure that consumers and tax payers are treated fairly -- and I'm going to talk a little bit more about that one aspect in a minute -- promoting greater fuel efficiency is the second area, boosting our gasoline supply at home is a third area, and then for the long-term investing aggressively in alternatives to gasoline, so that we can eliminate the root cause of high energy prices. And that's where he'll really focus on the Advanced Energy Initiative, and how we're working to transform the way we power our cars and trucks.

But anyway, jumping back to the first part of his plan. The first part is to make sure that American consumers are treated fairly at the gas pump. And the President will talk about how, at his direction, the Federal Trade Commission is investigating whether the price of gasoline has been unfairly manipulated in any way since the hurricanes struck last year.

Q: At his direction --

MR. McCLELLAN: Yes, at his direction, the Federal Trade Commission.

Q: He's going to ask them to investigate, or they already are?

MR. McCLELLAN: Yes, at his direction, the Federal Trade Commission is investigating.

Q: Further?

MR. McCLELLAN: Whether the price of gasoline has been unfairly manipulated. And also he's directed Department of Energy and Department of Justice to conduct inquiries into possible cheating or illegal manipulation in the gasoline markets. I think you all heard the President say very clearly that we will not tolerate price gouging. And so these are two important directives that the President has made.

Q: He's directed Department of Justice and Department of Energy to do what?

MR. McCLELLAN: To conduct inquiries into possible cheating or illegal manipulation in the gasoline markets.

Q: -- taking these now, or --

MR. McCLELLAN: This is what we're directing these agencies to do.

Q: -- it's effective yet?

MR. McCLELLAN: Well, they are aware that he's directed them to do this, so they are taking -- they are in the process of taking these steps. And also tomorrow the Attorney General and the FTC will be sending a letter out to all 50 states -- to all 50 state Attorney Generals, because the state Attorney Generals have primary authority over price gouging issues. On that letter I think they'll remind them to stay on top of this, and they'll also talk about how the federal government is here to assist in those efforts.

And then one other area in this first part of his plan that he'll talk about is that energy companies -- he'll essentially call on energy companies to reinvest their profits into expanding refining capacity, developing new technologies, and researching alternative energy sources. That's an important responsibility, and that's something he will touch on in the remarks, as well.

That's the part I wanted to preview. There are some additional steps that he's going to be talking about in the remarks tomorrow that we're taking in the short-run, and he'll spell those out, but I wanted to touch on that first part of the plan, and some of what he's talking about there, as a preview for tomorrow.

Q: Are these steps that he's directed -- these directions he's given these departments, when did he do this? He's already done it?

MR. McCLELLAN: It's recently. He's already -- I'll check the specific -- if there's a more specific time. But you heard him talk about price gouging recently. So he'll talk about how, at his direction, these agencies are taking these steps.

Q: Was this like around the time of Hurricane Katrina, or more recently?

MR. McCLELLAN: No, this is recently, just recently.

Q: Like the last couple weeks?

MR. McCLELLAN: I just told you, I'll try to give you a more specific time. I'll come back here and be glad to share that with you.

Q: Does the President think any of these specifics that he's going to talk about tomorrow will bring down the price at the pump within the next week or month?

MR. McCLELLAN: Well, if you'll recall, last week, and even before, we talked about how -- in the long-run, to address rising gas prices, you have to really address the root causes. And that's why the President outlined a very bold initiative in the State of the Union to get us off our dependence on foreign crude, or foreign oil. He's talked about how we are addicted to oil. And so that's what you have to do in the long-run, is eliminate that cause of high gas prices.

In the short-run, there are steps we can take to help address the problem. And that's -- it's not only the steps I've mentioned just now, those are some steps. But he's going to talk about some other steps that we're taking as well to help address it in the short-run. This is not something we got into overnight, it's not something we're going to get out of overnight. But there are some steps we can take.

Q: So will these actions help to bring down gas prices in the short term?

MR. McCLELLAN: It will help some in the short-run. But, again, the reason why we are in this position is because of our dependence on foreign oil and our addiction to oil, as the President has talked about. So it requires a long-term solution.

Q: I'm a little confused.

MR. McCLELLAN: We don't want you to be confused.

Q: Yes, I know. The President has repeatedly said that the cause for high gas prices is high global demand for oil. So what makes him suspect that there's been any price manipulation when he already thinks that global forces are pushing up the price of oil?

MR. McCLELLAN: It's important to make sure that there's not any price gouging. The federal government has a responsibility to act, and we share a commitment with congressional leaders to make sure that we are acting to ensure that there is no price gouging. And that's what we will continue to do. This is one part of steps we can take in the short-run.

Q: Is there a suspicion? Is there anything that has caused you to suspect that there is market manipulation, as opposed to just high demand?

MR. McCLELLAN: Well, gas prices are high right now, and that's why you want to make sure there's not. And so that's what he's going to be talking about in that context.

Q: I'm confused again, too. If the President had already directed the FTC and these other people to do these things, why did Frist and Hastert write to him today asking him to --

MR. McCLELLAN: Well, when I say, "recently," he's just now directing them to take these steps. That's why the letter is going out from the Attorney General and the FTC. He talked about this last week a number of times. And so that's the context in which you should look at it. But we've been in close contact with Speaker Hastert and Leader Frist about these issues. We are all on the same page when it comes to making sure that there is no price gouging. And the President has said very clearly that this is something we will not tolerate, particularly when gas prices are high.

Q: The President has a number of personal contacts, and the Vice President has personal contacts in the oil industry. Has there been any conversation between either of them with oil executives to try and get them to either give assurances about market manipulation, or try and bring down the price?

MR. McCLELLAN: We've previously talked about how all of us have a responsibility to do our part when it comes to addressing high gas prices. And that's something that we talked about before, and we're continuing to talk about. Tomorrow the President is going to make very clear, in a public way, that energy companies should reinvest those profits that they're making back into new technologies and alternative sources of energy. You know, if there are any updates on his calls, or things like that, I'll be glad to share that with you at the appropriate time.

Q: What are two and three again? I missed those. Could you go over those two?

MR. McCLELLAN: Sure. They'll be in the transcript we'll have. They are promoting greater fuel efficiency and boosting our fuel supply.

Q: Will he mention ANWR tomorrow?

MR. McCLELLAN: This is the part I'm previewing in the speech today. The speech is being finalized, and there will be more tomorrow. I didn't preview everything.

Okay, thank you.

* * * * *

MR. McCLELLAN: Okay, quick update. On the FTC investigating possible price gouging, that was -- the President did direct the FTC to do that in the aftermath of the hurricanes last fall.

And then on the Department of Energy and Department of Justice conducting inquiries into possible cheating or illegal manipulation of gasoline markets, that's really happened in the last few days. The President will be publicly announcing it tomorrow.

Q: The FTC thing, that was something that you guys had announced previously?

MR. McCLELLAN: We had directed the FTC to do it in the aftermath of the hurricanes.

Q: Almost a year ago?

MR. McCLELLAN: We talked about it. The hurricanes were last September.

Q: What's the status of that investigation?

MR. McCLELLAN: Well, the FTC could probably give you an update, in terms of -- I think the Department of Energy even put out some information last week, where they did some initial checks, and there were reports -- there are ways for consumers to report possible incidents of price gouging. They have a website and they have a toll-free number that they can call into. I think to a large extent people were acting appropriately, but they did find some instances where there problems. And the Department of Energy or FTC can probably get you more on that.

Q: Fuel mix was -- the fuel mix change was after Katrina, and the FTC and the Justice Department was, what did you say, the last several days?

MR. McCLELLAN: I'd say the last few days. This is something we've been talking about with congressional leaders about doing, as well, and as you saw in the letter from Speaker Hastert and Leader Frist.

Q: Has he been working on the speech on this flight?

MR. McCLELLAN: He has been, yes, and he's also been visiting with the Congress folks that are on board.

END 7:54 P.M. EDT