With the summer travel season approaching, our nation's economy in slow recovery from a recession, and political uncertainty escalating in oil producing regions, high gas prices place at risk the American quality of life, the stability of small businesses and farms, and our national security.
The time has come for our nation to address this issue, and work toward solutions geared to help working families and small businesses, and set as a lesser priority welfare payments to multi-billion dollar corporations and the economic stimulus of foreign governments.
The price of crude oil has increased by over 25% since just January of this year, despite the fact there are no short-term supply concerns. Even though social unrest in Libya has caused concerns that it will not meet its production goals, Saudi Arabia has increased production and has said it will continue to offset any lost Libyan supply.
In addition to offsets for lost Libyan production, industry analysts say there should soon be more supply coming from the Gulf of Mexico. On Monday the Obama administration approved a deep water drilling permit for Noble Energy (the first awarded in the Gulf since last April's BP spill disaster). It is not a dip in supply or a short-term increase in demand that has forced prices through the roof, it is the rampant speculation by conglomerate investors who are bidding up oil and forcing up gas prices by using their ability to bully the market at the expense of the small consumer. Regulation of oil speculation could help ease down prices in a matter of weeks.
Big Oil Keeps Getting Big Help
The major oil companies, whose profits for 2010 are reported to have exceeded a combined one trillion dollars, continue to receive tax breaks and subsidies from the American taxpayer. For far too long, the American political system has allowed itself to be bent to the will and welfare of large, vastly wealthy interests and have written laws and policies that place workers and consumers and at a decided disadvantage. Our country must stop giving taxpayer dollars away to multi-billion dollar corporations.
ExxonMobil's first quarter earnings this year were $10.7 billion, the company's best such period since it reported $14.8 billion in profits in the third quarter of 2008, the last time gas prices were above $4 a gallon. This is a 69% increase from last year. I am glad any time a business makes a profit, but companies raking in billions and billions of dollars should not be getting checks back from the treasury or gouging the American public. In January of 2011, 414,000 barrels of gasoline a day were exported from the United States to be sold on the world market for the simple sake of oil company profit. Perhaps if these corporations were more directly accountable for their actions, and less protected by politicians and lobbyist, they would occasionally do things in the best interest of the American consumer and our nation as a whole.
Being prepared for Emergencies
Catastrophes and crises of all kinds do have an impact on supply, demand, and delivery of oil and gas. American consumers must be insulated from being forced to pay outrageous price increases every time a crisis occurs, or a foreign government changes hands. We simply cannot let other nations or natural disasters jeopardize our economic stability. I have proposed the formation of a National Strategic Gasoline Reserve. Our nation should store a steady supply of gasoline to be used in times of emergency to help protect families and businesses from the burden of drastic, short-term price hikes. We can take further steps towards energy independence in the most important way possible--ending the manipulative practices of some oil-producing nations. With an added reserve, times of uncertainty and wild market fluctuations will not result in an added price at the pump.
Putting America's Future First
As gas prices increase, the technologies for fuels to replace petroleum and the markets for vehicles that consume less of it are going to be in higher demand. Here again, we are falling behind, giving away more jobs, and future prosperity, to China. China's "clean vehicle plan" will provide $15.28 billion over 10 years for research and development of hybrid and electric vehicles. China wants to be the world leader in clean vehicles, and has set as its goal sales of 5 million units by 2020. Its government will invest in core technologies--battery and electric motor manufacturers.
With this sort of investment and long-range planning, China could take a 15 percent share in the global clean vehicle market by 2020. And while China is marshaling its resources in products that create jobs in that country from the manufacturing and sale of products that depend less and less on gas and oil, our government continues to give billions in subsidies and tax breaks to corporations that send American jobs overseas. Once again, the failed policies of Washington tie the hands of the American worker and consumer, creating the option for us to either pay ever-escalating fuel prices, or buy alternative energy vehicles from China. Telling a working man or woman that he or she has the choice to either make the Saudi Arabians richer or make the Chinese stronger is hardly a choice worth offering. Washington must stop its partisan wrangling and focus on energy and trade policies that work for America, first.