On Friday, June 6th the price of a barrel of oil increased more in one day than an entire barrel cost a decade ago. Today in Central Kentucky, some families are choosing between buying groceries and getting to work in the morning. As gas prices soar to over $4 per gallon, I know that Kentuckians need relief now.
Gas prices are high for a number of reasons. Decades of failed policies and the increase in demand from new world powers such as India and China are now catching up to Americans. As you may know, the weakening dollar has helped make the price of a barrel of oil skyrocket, while price speculation by major investors further artificially drives up the price. With new international markets, price speculation and the weakening dollar, supply and demand are not as simple as they used to be.
Even so, why aren’t the oil and gas companies producing on the millions of acres they already control? As you and I are paying $4 per gallon, oil and gas companies are making record profits, receiving federal tax breaks and giving their executives salaries of tens of millions of dollars. Given this, it is hard to believe that the oil companies are not taking advantage of consumers.
Providing oil and gas companies with more land to drill is often seen as the cure-all for our energy problems. The fact is, however, oil and gas companies are choosing to drill on only about a quarter of the 68 million acres (bigger than the size of Kentucky, Tennessee, and West Virginia combined) already leased to them by the federal government. Even though these companies have 81% of all the known reserves in the United States, they refuse to extract the oil and natural gas they already control.
This is why I am the original cosponsor of the Responsible Ownership of Public Lands Act compelling oil companies to produce on the millions of acres they already control. They either drill on the land already leased to them by the federal government, putting millions more barrels of oil on the market, or pay a per-acre fee that goes back to taxpayers. While the solution to this problem is complicated, there is plenty of room for the oil companies to do more drilling on accessible property without opening up more federal land.
Some of my colleagues want to give oil companies still more land for drilling such as the Arctic National Wildlife Refuge (ANWR) in Alaska, but I do not think the solution is to give them more acreage to drill for resources they can already access. Even if additional public lands were opened up for the offshore drilling of oil, it would have little if any immediate impact on the price of gas. In fact, a 2007 study by the Department of Energy concluded that opening up offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before the year 2030.”
Congress has recently taken a number of steps to counter rising gas prices. We suspended new deliveries of crude oil into the Strategic Petroleum Reserve, passed a law to protect consumers against price gouging during energy emergencies, and authorized the Department of Justice to take legal action against the Organization of Petroleum Exporting Countries (OPEC) if they conspire to artificially set the price of oil.
It is important, however, for us to realize that short-term fixes are not the solution to our long-term energy problem. In the last 18 months Congress has passed more legislation encouraging energy efficiency and the development of homegrown biofuels like wind, solar, and geothermal than any other Congress. I think that the best way toward energy security and economic stability is to invest in new, green technology and domestic, clean, renewable fuels which over time will reduce our reliance on oil.
Each of us has a responsibility to secure our energy future–oil companies, Congress, and American consumers alike. We need to end the partisan finger-pointing and take action. It is time to protect the future of Central Kentucky families, not the future of oil companies.
