Tired of unfair laws and unreasonable taxes, American colonists proclaimed freedom. As we celebrate liberty on July 4th, it seems ironic our country has evolved from declaring independence from foreign oppression to dependence on foreign oil. And while there’ll be no tossing of Venezuelan oil into Boston Harbor -- it isn’t English tea, after all -- the money squeeze consumers are feeling now is not unlike the one which generated a revolution 232 years ago.
Our reliance on foreign oil is a battle we’ve been waging since the 1973 embargo, which gave us our first warning of the price we’d pay for continued dependence on imported oil. Today, that price stands at $4 a gallon for gasoline and $5 for diesel. It shows up in the food we eat, the clothes we wear, and the trips we take or don’t take. It also turns up in the price of protecting our physical and economic security.
Americans aren’t looking to Washington to explain the prices. They’re looking for some relief.
Congressional Republicans are ready to help provide some of that relief. Recently, we joined with other Members from the Metroplex to tour a grocery store and gas station to talk about the impact prices are having on local families and businesses. Afterward, we laid out our realistic plans to bring costs down, stifle speculation and make us less dependent on foreign oil by increasing the supply of American energy, by refining more and reducing biofuel mandates.
First, we must end our self-imposed domestic energy embargo. The majority of oil we use everyday is imported. But did you know there is enough oil in the small piece of Alaska known as ANWR to replace all almost our imports from Saudi Arabia? That is just a small part of the hundreds of billions of oil reserves off limits in the U.S. and off our shores. We also have 2 trillion barrels of shale oil reserves. Yet, only 6 percent of our federal land is available for exploration. China, Venezuela, India, and others are working with Cuba to explore for oil near our shores. Why aren’t we exploring the same areas?
Second, Congress can help stifle speculation by encouraging production. Strong demand, tight supplies, and a volatile marketplace have attracted investors looking for good returns amid falling stock prices and a falling dollar. That's helped push crude oil prices up. While oversight, transparency, and improved data availability are good, they won’t overcome the fact that worldwide energy demand is roughly the same as worldwide energy supply, and is growing. If Congress says we're going increase domestic supply, this would stifle some speculation on the world market, drive down the price of a barrel of crude, and ease the pain at the pump.
Refining more and reducing mandates are important solutions as well. We haven’t built a new refinery in America since 1976. So as we talk about importing oil, we must also discuss why we’re increasingly importing gasoline.
Right now, U.S. refineries are operating at tight capacity, which, in turn, limits the quantity of gasoline and other products they can produce. This makes us vulnerable to natural disasters like Hurricane Katrina or other supply chain problems. If we want gas prices to change, our refining capacity needs to change as well.
Then there’s the ethanol impact. Because of subsidies, taxpayers pay 50 cents for a gallon of gas-blended with ethanol before drivers pay $4 for the same gallon. The Democratic-led Congress increased incentives and mandates for alternative energy with an emphasis on biofuels. This pushed farmers into planting corn for ethanol and consumers into buying gasoline containing it. Last year while we burned 24 percent of our corn supply as fuel, we reduced our oil consumption just one percent. Additionally, the unintended consequence of the new energy policy was a spike in food prices. This new biofuels policy is making things worse, not better. Congress has a responsibility to change that.
If we want gas prices to drop, we’re going to have to make it possible to actually produce energy in America. We have heard from our neighbors at grocery stores and gas stations that they’re ready to modify misguided policies. And there’s no better time than the 232nd Independence Day for Congress to begin doing just that.
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