Jon Powers on Oil Prices
This is an article that Jon Powers released today on the issue of gas prices and the continuing replenishment of the Strategic Petroleum Reserve. The Senate voted today 97-1 to halt replenishment of the reserve, thus freeing 70,000 barrels of oil into the open market on a daily basis. It’s a drop in the bucket, but a very expensive bucket. - BP
As Memorial Day approaches, many working families across Western New York are preparing their summer plans and struggling to find ways to afford our skyrocketing gasoline prices. The price for a gallon of gasoline is now over $3.85 and approaching $4 in Western New York, which means that car owners who have a 15 gallon gas tank are now paying almost $60 to fill up at the pump.
This is a direct reflection of Congress’ lack of foresight on a clear energy policy that shifts the focus from the consumption of foreign oil to innovations that allow cars to get better mileage and alternative energies that we can create right here in America. This new direction would reduce our dependence on foreign oil, create good jobs right here in America, and ultimately reduce the costs of fueling our cars. Any shift in policy that moves away from foreign oil is going to take time, but the truth is, Congress has had 30 years of time to address this problem.
In 1975, the United States created the Strategic Petroleum Reserve as a result of the 1973 energy crisis. The purpose of the reserve was to mitigate supply disruptions so that Americans would not be left dry and allow the United States a safety net while Congress moved aggressively to create a sustainable alternative energy resource. Basically, it was created for times like these, times when our gasoline prices are going through the roof as a result of our addiction to foreign oil.
By adding oil to the reserve when prices are low, Congress made a sound investment that can provide a buffer to the economy and avert a crisis now that prices are high. But by continuing to stockpile oil at today’s high prices, Congress is actually making the problem worse for consumers by simultaneously increasing demand for oil and reducing the supply available to the rest of us.
Today, Congress is voting on a bill sponsored by Senator Byron Dorgan of North Dakota which may have a temporary solution to the oil fix America finds itself in today. This legislation, experts say, could lower the price of a gallon of gasoline by as much as 24 cents. That could save car owners approximately $3-$5 each time they fill up at the pump. Senator Dorgan wants to divert 70,000 barrels of oil deposited into the Strategic Petroleum Reserve each day into our economy in order to help increase access to oil and thereby lower the price of gasoline.
The Strategic Petroleum Reserve currently contains 702 million barrels of oil and is filled to 97% of its capacity. Using 70,000 barrels is not the answer to our long term problem, but in the short term it will provide some of the relief that many Americans need this summer.
A lasting solution requires developing an energy policy that weans America from our oil addiction and allows us to be self-reliant with regard to our energy needs.. I hope that Washington will have the courage to do that now, and developing such a plan would be one of my top priorities in Congress. But, in the meantime, Congress should pass Senator Dorgan’s bill and give us all a brief reprieve from ever-escalating gasoline prices. This is a summer break that many Americans need.
al-alo Says:May 13th, 2008 at 10:14 pm
YeaY! potentially compromising national security for a couple bucks a tank!!! what a joke. never mind the fundamental problems with the system: limited mass transit. sprawl. piss poor CAFE standards. THAT is the problem.
everybody pays more for health insurance. you know, hundreds, if not more, dollars a year. your pension? oh thats gone. your kids jobs? overseas. meanwhile we all piss and moan about pennies, but the big bills fly out the door.
meanwhile, we screw around these little things. next up: lets talk about those grand island tolls!
al-alo Says:May 13th, 2008 at 10:20 pm
two more questions:
when do we start filling the reserve again, at $150 or $160 or $200 bucks a barrel? lemme know when the price is a bit more convenient for you.
since at this point oil refineries are running at capacity and this “extra” oil has no place to go, how is this not just grandstanding like McCain and Hilary?
Jim Ostrowski Says:May 13th, 2008 at 10:28 pm
This is the biggest non-problem in the country. There is no shortage of oil or gas. The price of gas (minus inflation and taxes) is quite low, the biggest bargain of all time. Buying oil from countries that can produce it cheaply is not a problem; it’s a solution!
There is no addiction to oil, just a preference for a convenient and cheap form of energy. Dependence on foreign oil is an imaginary problem. They will sell us oil as long we mind our own damn business, which we should be doing anyway for plenty of good reasons unrelated to oil.
Cut the taxes and stop printing paper money to pay for the nation-building wars and the campaign promises of FDR and LBJ.
starbuck Says:May 13th, 2008 at 10:38 pm
What exactly does Mr. Powers mean by promising the voters that a new direction in Congress will “reduce the costs of fueling our cars”?
There’s no evidence that alternative energy will be less expensive.
Higher mileage standards? Ok, that could lower the cost of fueling our cars. But higher milage standards were already passed into law last year:
http://www.cnn.com/2007/POLITICS/12/19/congress.energy/index.html
Is Mr. Powers promising the voters he’ll push for raising mandatory fuel mileage even higher than Congress already raised it last year? Higher than “a corporate average of 35 miles per gallon by 2020″?
If so, has Mr. Powers run that idea by the UAW leadership yet?
If not, then what exactly is his plan to lower the cost of fueling our cars?
Gas Prices » Jon Powers on Oil Prices Says:May 13th, 2008 at 10:44 pm
[…] unknown wrote an interesting post today on Jon Powers on Oil PricesHere’s a quick excerptThis is an article that Jon Powers released today on the issue of gas prices and the continuing replenishment of the Strategic Petroleum Reserve. […]
starbuck Says:May 13th, 2008 at 10:49 pm
Cool little tool for graphing gas price comparisons over selected time interval (past month, past 5 years, etc) between any North American cities:
http://ontariogasprices.com/retail_price_chart.aspx
Choose “Canada Average” as “Area 1″ vs “USA Average” as “Area 2″.
Choose the maximum Time Period of 6 years. This shows Canada’s gas price changes moves in near lock step with U.S. gas prices. The prices plotted are in Canadian dollars, so note the gap narrowed over the past year with currency valuations - but the ups and downs in the price are remarkably in step over any time period examined.
Is the rise in Canada’s gas price over the past year, which is the same as the U.S. price rise, also the fault of the U.S. Congress accoring to Mr. Powers?
Denizen Says:May 14th, 2008 at 1:17 am
More dumbass pandering to car-addicted voters.
I wonder when politicians will actually start addressing the underlying issues of our cheap energy addiction? When will discussing things like better mass transit, rebuilding our cities, and sprawl mitigation become a part of the conversation?
Mike In WNY Says:May 14th, 2008 at 1:50 am
Return the money that car drivers have paid to subsidize mass transit and people will have no problem with the cost of filling their tanks. Or maybe we should just subsidize driving a vehicle with a 75% subsidy to level the playing field (extreme sarcasm).
Howard Goldman Says:May 14th, 2008 at 7:42 am
Perhaps we should also invest in a “strategic oil drilling capacity reserve” as well as our strategic oil (storage) reserve. That way we can continue to use up our enemies oil resources and in the event that we are ever cut off, we can begin using our own natural resources again immediately.
hank Says:May 14th, 2008 at 9:32 am
NC’s gas tax is 2nd highest in the Nation. I believe the NC General Assembly didn’t want to take “The Crown” for #1 from New York.
My F-150 was on E yesterday, and it took 80.00 to fill it. I took it home, parked it and broke out the Corvair. It will eat a tank a week commuting too, but a 11.7 gallon tank is cheaper to fill than a 27 gallon tank. I’ll live without the AC this summer–wouldn’t be the first time!
Once my Corvair Rampside Pickup engine is built and I have the truck roadworthy, that Ford just might end up with a “For Sale” sign on it.
Perhaps some new millionaire will want to buy it. Or maybe I’ll trade it for a Ranger with a 4cyl.
Greg Says:May 14th, 2008 at 10:39 am
From what I’ve read, building more refineries, or at a minimum replacing those lost due to Katrina and having 1 blend nation wide instead of all these different ones in different states would help more.
STEEL Says:May 14th, 2008 at 1:55 pm
The government needs to step in and guaranty our God given right to cheap gas. If they don’t they are basically denying us the benefits of our religious beliefs and the constitution does not allow that.
So you see the constitution guaranties cheap gas.