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Congress Steps-Up Efforts to Support Hurricane Katrina Victims

Members of Congress continue to work on a number of legislative steps to expand government assistance for victims of hurricane Katrina and deal with its economic impact. Concern about the short and long term impact on Americans of high gasoline prices, aggravated by hurricane Katrina, is being supplemented by some new predictions regarding high prices for heating oil and natural gas.

So far, Congress has approved two installments amounting to about $62 billion to deal with the immediate after-effects of the storm on hundreds of thousands of people in the Gulf coast.

Lawmakers have approved or are preparing other pieces of legislation designed to cushion the financial repercussions of hurricane Katrina and its devastation, including measures providing tax and other relief.

But a key focus continues to be on energy, both gasoline prices driven far above already high levels existing before the storm, and what many worry will be record high natural gas prices.

Following earlier hearings in both chambers of Congress, a House Energy and Resources subcommittee heard discouraging news from government officials about the impact of hurricane Katrina.

Guy Caruso is administrator of Energy Information at the Department of Energy.

This winter, the economic pain of higher prices of heating, either by natural gas or heating oil, is going to be felt across this country," Mr. Caruso says. "Probably, the Midwest region will suffer the largest increases."

Republican Congressman Darrell Issa, chairman of the House Energy and Resources Subcommittee, says hurricane Katrina made a bad situation even worse, adding Americans are facing a crisis in adequate supplies of natural gas and its impact on industry and individuals:

"Will homeowners be able to afford their natural gas heating bills this winter, and if prices continue to skyrocket will they be able to afford it next winter?," Mr. Issa asked.

Two weeks after hurricane Katrina struck the Gulf coast, Assistant Secretary Rebecca Watson from the Department of Interior says 56 percent of oil production and 35 percent of natural gas production remains shut down.

The storm hit onshore production facilities the hardest, she says, and presented this scenario.

"Before hurricane Katrina we were already in a tight supply," Ms. Watson says. "Demand for natural gas is expected to increase dramatically both here at home and globally, and well into the future.

Michael Zenker, senior director of North American Natural Gas, says prices are likely to remain high for the next two years.

"Supply growth will begin to soften prices in 2008 in our view. Unfortunately, that means barring anything in the immediate term to change that course, price relief for natural gas remains as far away as 2008," Mr. Zenker says.

At the same hearing, Tyson Slocum, Energy Program Research Director for the group Public Citizen, blamed high prices on market manipulation by natural gas companies.

"America's natural gas companies have been fined over two-billion dollars in the last three years for manipulating natural gas markets," Mr. Slocum says. "This clearly shows that we do not have an adequate regulatory framework over natural gas markets, and we feel there is market manipulation continuing today in the United States."

Congressional Democrats, meanwhile, continue to aim criticism at the White House, saying President Bush is not doing enough to deal with gasoline price gouging.

New Jersey Democrat Robert Menendez favors a new windfall tax on excessive profits oil and gas companies may be making, something Republican leaders have vowed to resist.

"Maybe it's because we have two oil men in the White House who don't seem to have the sensitivity of understanding the nature of these energy impacts upon the American people, both in gas prices and as we look forward to the upcoming winter season in terms of home heating fuel costs as well," Mr. Menendez says.

President Bush has said he understands the hardships Americans face due to high energy prices.

Republican leaders say they are working on a new energy bill that would emphasize among other things, construction of new refineries, and focus on vulnerabilities highlighted by damage to production facilities from hurricane Katrina.

Congress earlier this year passed energy legislation long sought by President Bush, but sharply criticized by Democrats as a sell-out to big oil companies.

As they tackle energy problems, lawmakers continue to debate exactly what form to give an investigation of government failures in the response to Katrina.

The Republican-controlled Senate Wednesday rejected a Democrat-sponsored proposal to create an independent commission similar to the panel that examined the September 11, 2001 terrorist attacks.

Democratic Congressman Steny Hoyer told reporters Democrats will continue to push for an independent commission, suggesting they might decline to participate in a bipartisan House-Senate panel proposed by Republicans.