I do a lot of driving. Last weekend, I filled up my Chevy Impala in Bowling Green -- and it cost $42.
When gas prices rise, Americans suffer. Increased fuel costs threaten to wipe out many of the gains made in the fragile economic recovery. New revenues will go toward increased fuel costs, instead of businesses investing in new hiring and capital investments. Families will be forced to make hard decisions. Should they save for their children's college education, save for the future or pay for higher gasoline in order to get to work?
The price of petroleum based products -- such as ink, tires, tool racks, anti-freeze, fan belts, farm fertilizers, insecticides and fishing rods -- will only increase.
Our seniors who are on fixed incomes will have to make tough choices -- prescription drugs or gas.
In the past year, fuel prices have skyrocketed another 78 cents. Most of that increase has come in the past three months. In the last week of February, gas prices nationwide averaged $3.19. Since then, prices have jumped 38 cents. The same is occurring in Ohio, where last week we were paying $3.55 -- 79 cents higher than a year ago.
While $3.57, the national average, seems high now, Americans are expecting to pay $4.36 this year, according to a Gallup poll. Instability in the Middle East and North Africa, stagnating global supply, along with strong global demand, is fueling this ballooning in the price of gas. This is incredibly frightening given that the United States cannot meet supply expectations by itself. In 2009, the United States demand doubled what it could domestically produce. We consumed 18.77 million barrels per day, when we could only supply 9.14 million barrels per day.
However, the current situation has been foreshadowed since the beginning of the Obama administration.
Back in 2008, presidential candidate Barack Obama said he would "prefer a gradual adjustment to higher oil prices" as a possible way to push his renewable energy agenda. Well, it appears that he has gotten his wish. According to the Energy Information Administration, which tracks weekly U.S. retail gasoline prices, the cost of gas has been creeping up. Since Obama took office in January 2009, prices have risen by about $1.90.
The agenda he pushed through in the American Recovery and Reinvestment Act, the 2009 stimulus, included more than $80 billion in renewable energy spending and sought to create "sustainable jobs." A market-based renewable energy agenda is necessary but far from sufficient to address our overall energy problem, not when consumer confidence is dropping and the futures market is predicting higher prices.
The uncertainty around the future of oil prices suggests that America must immediately achieve energy security while keeping prices affordable for Americans. For that reason, we need a comprehensive energy strategy that includes planning for the future and addressing pressing immediate concerns. Knee-jerk solutions like tapping into our Strategic Petroleum Reserve will not solve the problem. Using our reserve, 787 million barrels, will not address our supply and demand issue and risks America's national security.
Americans have been through at least five major oil disruptions that have caused sticker shock at the pump: the Suez Crisis, the Arab-Israeli War, the Iranian Revolution, the Iran-Iraq War and the Persian Gulf War. And it seems we haven't learned much from the past.
Hopefully this time around, once and for all, Congress and the White House will agree on a comprehensive approach to increase supply, reduce prices and create jobs.
A few steps we can take to minimize the damage from future international oil shocks and ease the pain at the pump:
* Streamline the permit process for offshore drilling.
* Encourage companies to invest in shale oil extraction technology, like Utica Shale in Ohio, Pennsylvania and New York.
* Implement a competitive leasing program for the exploration, development and production of oil.
* Reject new taxes and/or regulations on oil producers and manufacturers.
* Allow exploration and drilling on public lands.
Without all of these approaches and without a comprehensive way forward, we will only find ourselves facing these oil shocks again and again, returning to this same conversation time after time.