I recently received a letter from a small business owner in Billerica.  She and her husband have owned a landscaping and paving business for over forty years.  They will soon be forced to close their doors due to the skyrocketing cost of oil.  Sadly their story is not unusual. 

We face a serious and lasting challenge: the world’s demand for energy will increase at a greater rate than what oil can supply.  I believe there are four major ways we can begin to take on this challenge.  First, we must get tough when it comes to excessive speculation in energy markets which numerous experts believe has driven up the price of oil to its current record-setting levels.  Second, we must increase the supply of oil and bring down the cost of gasoline.  Third, we need to develop a long-term comprehensive energy strategy with a focus on clean, alternative, renewable sources.  And, finally, we need to mitigate the costs that are inevitable as we transition to a future of energy independence.

A significant component of the dramatic run-up in the price of gasoline is unregulated speculation in energy markets.  Some oil speculators are betting that the price of oil will increase and their trading is driving up the price in the market.  Since 2003, this practice has increased 425 percent and several experts have testified before Congress claiming that it has inflated the cost of a barrel of oil by $20-$60.  I have supported bills that have passed in the House of Representatives to close loopholes that allow speculation to go unregulated, increase market transparency, and strengthen the Commodity Futures Trading Commission.  However, these bills have stalled in the Senate.

In order to allow more oil to reach our markets, one action which would deliver immediate relief at the pump is a small release of oil from our Strategic Petroleum Reserve (SPR), which contains more than 700 million barrels of oil.  The SPR has been tapped during other times of skyrocketing oil prices and each time the impact on prices has been immediate.  Oil fell by 33 percent in 1991 when the first President Bush tapped the SPR.  Similar action was taken by Presidents Clinton and Bush in 2000 and 2005 which resulted in oil prices dropping by 19 percent and 9 percent respectively. 

A comprehensive energy strategy does include drilling.  Currently 88 million acres of federal land are ready and available for drilling.  I voted in favor of legislation to encourage and accelerate drilling in these areas, including the National Petroleum Reserve in Alaska which has more oil and is closer to existing pipelines than the Arctic National Wildlife Reserve.  While part of the solution, domestic drilling will not solve this crisis or cause dramatic changes in price.  We cannot drill our way to lower gas prices when we use a quarter of the world’s oil, but sit atop less than 2% of the world’s supply. 

We need to develop a diverse energy supply to decrease our demand for oil while meeting our energy needs.  American ingenuity and the development of new technologies is the long term solution to this problem. 

This week Nuvera Fuel Cells, based in Billerica, unveiled the first hydrogen refueling station in Massachusetts which will be used to power a fleet of ten different hydrogen cars manufactured by major automakers.  A hydrogen powered SUV gets the equivalent of 50 miles per gallon and requires no gasoline.  Plug-in hybrid vehicles will also soon be coming to the market which can be powered for about a quarter of the cost of a typical automobile.

We must help these emerging industries bridge the final hurdles to being competitive so that their products can become broadly available.  I was proud to cosponsor legislation passed by the House earlier this year that will greatly expand tax incentives for renewable electricity, energy and fuel, as well as for plug-in hybrid vehicles.  Unfortunately, the President has threatened to veto these commonsense measures. Research and development incentives are critical to helping alternative technologies grow and allowing the American consumer to access them. They should be made available immediately.

Urgent effort is also needed to construct effective safety nets for those who are truly put in danger by the high cost of fuel.   I recently joined the New England Delegation in requesting that Congress triple the amount of funding for the Low Income Home Energy Assistance Program (LIHEAP), which helps low-income families heat their homes in winter.  Eligibility for LIHEAP should also be expanded as increasing numbers of families will need assistance this winter.  LIHEAP is just one example of a program that can assist families as we transition to a future not dependent on foreign oil.  The transition costs will be high and we must ensure that we are providing adequate funding to LIHEAP as well as to additional forms of assistance as we develop and implement a clean energy strategy.

This is a complex and long term challenge.  None of the individual actions I have described will solve our energy crisis, and none of them will permanently bring down the price of gas.  But together, these efforts put us on a path towards lower energy prices and a cleaner energy independent future.  We must act now.  By working together to support real solutions we can achieve clean, renewable, affordable and abundant energy that is sustainable, enhances national security, produces American jobs and grows the American economy.