With gas prices at record highs for this time of the year, it’s no wonder there’s been rhetoric from politicians on both sides of the aisle on how to reduce fuel prices. It seems the right and the left have been scrambling to find a silver bullet solution, simultaneously pointing fingers and deflecting blame.
The national average for a gallon of gasoline during March was $3.86, an increase of almost 50 cents in just two months. To put that in perspective, a 25-cent increase translates to a $35 billion price tag for the larger economy over the course of a year. That number doesn’t even take into account additional costs the average family or small business must take into consideration when gas prices rise. While it is good that political leaders in Washington have recognized the significant problems that high fuel prices pose for the American economy, the rhetorical gamesmanship taking place in the nation’s capitol does nothing to help consumers affected most by these untenable prices.
What the American consumer needs is a bold energy policy focused on strengthening our national self-sufficiency. We need our politicians to push for responsible energy production, combined with increased efficiency measures, which will take advantage of the plentiful resources our country enjoys.
The debate over gas prices essentially boils down to supply and demand. To date, there is a finite supply and an ever- increasing demand. We are competing with emerging economies for limited resources while also managing global instability- a recipe that will consistently lead to higher gas prices.
However, it doesn’t have to be this way. The Energy Information Administration indicates the U.S. holds more than 198 billion barrels of technically recoverable oil and 2,118 trillion cubic feet of technically recoverable natural gas. Still other studies have postulated that North America could be energy self-sufficient by 2030. Clearly, the U.S. has vast resources at its fingertips which, if developed would undoubtedly lead to lower prices at the pump and provide a tremendous boost to the economy.
Just increasing production in the Gulf of Mexico and Alaska, and approving the Keystone XL pipeline would bring 2.3 million barrels of oil a day online – more than the 1.8 million barrels per day that we import from the Persian Gulf. Because all three of these proposals can be completed under authority already held by President Obama, he can move them forward with a stroke of a pen – no legislation is necessary.
Yet none of this is happening. Rather than approving projects that would expedite delivery of North American energy supplies to U.S. refineries, the President is delaying or blocking these projects, pursuing policies that rely on other nations, and is considering tapping the Strategic Petroleum Reserve. Under the President’s watch there has been a continued slowdown of leasing and permitting in the Gulf and Alaska, OCS leasing in Virginia has been removed from the Department of the Interior’s leasing plan and there has been a continued push for tax increases on domestic oil and gas production which will reduce the number of new wells drilled and raise prices at the pump according to the Congressional Research Service.
In spite of all of this, the President touts increased oil and gas production under his Administration. What he doesn’t say it nearly all of this occurred on private lands outside of the federal government’s long reach. According to the Independent Petroleum Association of America, in 2010, oil production on federal land decreased by 13 percent. In the same year, federal lands saw the fewest number of onshore leases since 1984.
As we have seen in natural gas markets recently, increasing supplies of energy resources will lower energy prices. From 2008 to 2011, natural gas production went up 11% and caused a 50% price decline. While increasing oil production by 11% may not cause a 50% price drop at the pump, there is no question that bringing increased supplies of North American crude to U.S. refineries will result in lower fuel prices – which are desperately needed by everyone from trucking companies and airlines to farmers, commuters and soccer moms.
Both Republicans and Democrats have spent significant time discussing their views on how to reduce fuel prices and increase energy security. What American consumers actually need is what has been promised by politicians on both ends of Pennsylvania Avenue – a realistic and strong energy strategy that will enhance our economic and political security. We have the resources and tools in place to make the U.S. self sufficient; now all we need is leadership and follow-through.
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