Utilizing Domestic Reserves Is Key
Yes, it’s been a busy time on Capitol Hill — whittling away our time in Congress naming various post offices and recognizing just about every group under the sun from bowl-game winners to Little League champions to you name it. We have even found the time to haul Roger Clemens up to testify on the most pressing of national issues: whether or not he took steroids. What we are not addressing is what my constituents in southwest Michigan, and I’m sure others across the country, care about most: rising gas prices. At a time of record gas prices, Congress did have the “wisdom” to vote to raise taxes on the oil industry, which, if enacted, would
undoubtedly be passed along to all consumers in the form of even higher prices.
Our nation’s energy costs are at record levels. The price of a barrel of oil steadily hovers above $100, with no sign of retreating. Gasoline prices are on a path toward $4 per gallon. Yet, America’s oil resources remain off-limits to exploration. According to federal government estimates, there is enough oil in deep waters many miles off our coasts and on federal lands to power more than 60 million cars for 60 years. Additionally, if we advance the commercialization of the nation’s 2 trillion-barrel shale oil resource, we will meet the United States’ oil needs for more than two centuries.
Today, we import nearly 70 percent of our oil demand. It is difficult to comprehend that we are on a path to import 88 percent of our petroleum needs by 2012.
If we were permitted to utilize our vast domestic energy reserves, prices would fall and the United States would achieve a greater level of energy security. Inexpensive energy helped build our economy into the most powerful and prosperous in the world. High energy costs will take us in the opposite direction.
Biofuels, such as ethanol, are not the silver bullet to cut fuel prices or increase supply. While they are an important part of the overall puzzle along with conservation and efficient technologies, we must address the 800-pound gorilla in the room — our domestic resources.
Gasoline prices have increased 40 percent since 2007, while electricity and natural gas prices have also risen dramatically. Yet many in Congress continue to promote policies that will push prices even higher by foolishly blocking and creating disincentives for energy production in North America. They have also taken ill-conceived steps to block our military from using homemade fuel derived from coal and oil from our nation’s closest ally and northern neighbor, Canada. The glaring consequence of no new domestic energy production is greater dependence on foreign sources of energy, coupled with higher gasoline, oil and natural gas prices.
It is inexcusable for dictators like Hugo Chávez to have more influence over the price of our nation’s energy supply than the U.S. Congress. The American public will not tolerate a Congress that continually steps aside and does nothing as energy prices go through the roof. The price of gas today is more than $1 higher a gallon than a year ago. And yet, we have done nothing.
More than a decade ago, we had a unique opportunity to pursue an alternative policy and fortify our nation’s domestic energy supply. In 1995, President Bill Clinton vetoed legislation that would have allowed environmentally responsible exploration for an estimated 10.4 billion barrels of oil in a tiny sliver of Alaska. At the time, the naysayers stood by applauding the president’s veto, belittling the reality that the benefits of such exploration would be more than 10 years away. And now, more than a decade later, each and every one of us is literally paying the price for such a shortsighted policy.
Our own policies have made us less energy secure and have given us an uncertain energy future. We in Congress have a duty to pursue broad, visionary policies that will put our nation on an energy-independent path for many decades to come.
It is a basic principle of economics that price is determined by supply and demand. Oil, like any commodity, falls under the same tenet. If we increase supply and reduce demand, prices will fall. Our greater emphasis on alternative fuels, efficient technologies and conservation play an important role in our quest to alleviate demand. In Congress, we have already passed aggressive increases in Corporate Average Fuel Economy standards that will help curb demand one vehicle at a time through improved mileage. We must continue fostering the research and development of hybrid technologies to further reduce demand.
Now we must match the reduction in demand with increasing domestic supplies to pursue greater energy independence. Oil prices have continued to rise for a number of reasons, the most significant of which is the increasing global demand for oil, now at some 85 million barrels a day. In fact, demand for oil in emerging economies like China and India is now rising by more than 10 percent per year. Not only is this an issue of economics, it is also a matter of national security. We are fortunate to have the ability to shift our energy supply from Venezuela and the Middle East to our own American reserves. We are fast approaching a critical mass as demand for oil will only continue to increase across the globe, particularly as China’s and India’s thirst grows exponentially.
We cannot afford to wait any longer to take substantive action to reduce America’s dependence on energy from unstable foreign governments and dictatorships by increasing domestic production of oil and natural gas, recovering our vast oil shale reserves, all the while promoting unconventional fuels such as coal-to-liquids technology.
More than a decade after obstructing our nation’s path to energy independence, we continue to ignore our American energy resources and import energy from foreign dictatorships. Had Clinton not vetoed domestic production in favor of higher oil imports, we could be domestically producing more than 1 million barrels of oil a day and our economy would be fortified by a more diverse supply of oil production. Without that veto, hardworking American families from coast to coast would have a little more money at their disposal to help ease the cost of their day-to-day lives. But instead, we are filling the coffers of Iran and Venezuela, making the likes of Hugo Chávez filthy rich at the expense of American working families.
The alternative is to achieve lower prices along with energy security by relying on environmentally friendly American energy. We owe it to working families to pursue an energy policy with a vision of the future. Congress cannot idly stand by for another year and allow gas to eclipse $5 a gallon. The American public deserves better.
Rep. Fred Upton (R-Mich.) is ranking member of the Energy and Commerce Subcommittee on Energy and Air Quality.