By Congressman Bill Cassidy, M.D.
There is perhaps no domestic issue that challenges and frustrates every working American on a daily basis more than the rising cost of gasoline. From parents taking their kids to school on their way to work, to small business owners trying to make payroll, fuel prices that have nearly doubled in the last three years have a direct impact on nearly every aspect of our economy.
Contrary to popular belief, American-based oil companies or the owner of your local gas station have very little to do with setting the price you pay at the pump. The price of gasoline is primarily correlated with the price of crude oil on the world market, and that price can fluctuate significantly for a wide variety of reasons.
If we approach the issue head on, the most easily manageable factor of the price of oil is the ratio of supply to demand. It is a basic principle that by making more oil available, the price of that oil will decrease. The second, more complicated component of rising gasoline prices is the increasingly unstable security situation in the Middle East and Northern Africa, an area responsible for providing the world with millions of barrels of oil every day. Every time a dictatorial regime rises or falls in this region, as we have seen a number of times over the last year, the confidence of the world market in that country to sustain its output of oil is impacted dramatically - and so is the price.
So what can America do right now to decrease the price of gasoline and provide stabilit in the marketplace? While we cannot predict what will happen with unstable regimes, we can do something about supply and demand. There are several options that not only come at no cost to the American taxpayer but actually generate revenue for the government through royalties and fee payments by energy producers. In addition, it is estimated that collectively they would result in several hundred thousand new American jobs.
First, we can expand domestic production of American energy, including issuing more offshore oil leases in areas that are currently open for production, like the Gulf of Mexico.
Second, Washington can create a predictable regulatory environment by restructuring and reforming burdensome regulations that are holding back investment in facilities that bring energy to our homes and businesses.
Third, we can open up more territory to exploration and drilling, especially in places where there has been bipartisan support in the past, like Alaska and the Mid-Atlantic Coast.
Finally, the Obama Administration can give the green light to the rest of the proposed Keystone XL pipeline, which at full capacity can bring an additional 750,000 barrels of oil down from Canada to refineries in the United States. Contrary to popular belief, most oil imported into the United States does not come from the Middle East but rather from our friends and neighbors in Canada. Developing the Keystone XL pipeline will strengthen this important relationship, provide us with an abundant supply of energy and create thousands of jobs in the process.
It is important to note that there is no sure-fire solution to immediately lower gas prices. We also cannot deny that alternative fuels and clean energy technology may prove to be the energy of tomorrow. They should all be a part of any long-term energy plan, and as our economy improves, the need for affordable energy will only increase. We cannot jeopardize that recovery by intentionally holding back the energy of today.
We know what needs to be done. It is time for Washington make it happen.