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Oil Update - by Larry Kudlow

President Bush did himself some good by suspending the ethanol tax--at least for the duration of the driving season. He also did some good by stopping the fill rate for the Strategic Petroleum Reserve. Gas prices slipped lower today, as did crude oil.

The biggest factor in rising energy prices is still the world economic boom. And of course, various political saber rattling from inside nuclear ambitious/anti-Israel Iran and leftist President Hugo Chavez's Venezuela. But around the edges, the president's mid-course correction for energy policy will at least stabilize the situation as everyone then waits for the upcoming hurricane season.

One action President Bush should have taken (and could still take) is to end the 54-cent-a-gallon tariff on imported ethanol (which basically means Brazilian ethanol.) Why the U.S. government should protect the already heavily subsidized ethanol industry at the expense of American consumers is hard to fathom.

Energy Secretary Sam Bodman actually defended the tariff earlier this month saying it was necessary so that foreign producers "can have no advantage over American companies." Holy smokes, this is the energy version of steel tariffs and it's just as bad an idea.

But all this talk of price gouging is nothing more than the usual political pabulum.