Gas prices are rising, and President Obama is worried. His advisors are scrambling looking for a quick fix. Understandably, some of them are looking to the ground beneath Louisiana to pump more oil into the nation's supply.
This oil is in the Strategic Petroleum Reserve, stored in hollowed out salt caverns where it was pumped in by the federal government ready to be extracted in an emergency. Presidential advisors recognize the basic laws of supply and demand. The release of oil from the reserve may briefly lower the price. The question is whether this is a good idea.
One consideration is the requirement to refill the reserve. When the reserve was established, it was considered an option of last resort. The law requires that it be filled again as soon as possible. This means that the government pays the exorbitant price, and, yet again, the federal deficit is increased to buy expensive oil.
Another is the question of whether this is really an emergency. We could end up emptying the reserve right before further unrest in the Middle East shuts down pumps in Saudi Arabia or closes the Suez Canal.
There has to be a better way.
We are dangerously dependent on highly unstable regions of the world for the fuel that runs our cars and heats many of our homes. We've known this for decades, but we often resort to short-term or overly idealistic solutions.
The long-term solution preferred by the Obama administration is artificially higher prices for fossil fuels, including gasoline. Their hope is that high prices encourage investment in renewables like wind and solar. But these alternatives aren't even close to competing with fossil fuels. Green energy sounds appealing, but even with tens of billions of dollars in government subsidies it will be decades before it plays a significant role in our energy economy.
Economic growth is dependent on low and stable energy prices. Some economists worry that extremely high oil prices could create a double-dip recession. There are actions that we can take to calm volatility in the market almost immediately.
That's what the House Republican American Energy Initiative is about. We have three goals: stop government policies that are driving up the cost of gasoline, expand energy production to lower costs and create jobs, and promote an "all of the above" strategy to increase all forms of American energy.
The first thing you do when you're going down the wrong road is stop. That's what we need to do with the Environmental Protection Agency's plan to make energy more expensive. Cap and trade couldn't muster the votes in the Senate, but now the EPA wants to institute a similar plan via regulation. We want to work together with Democrats to stop this bureaucratic power grab.
Next, we have to develop our own resources instead of relying on other nations. We have an astonishing amount of oil and natural gas resources in our country. In Pennsylvania, the Marcellus Shale contains enough gas to fuel our nation for a century. We have undeveloped oil fields in Alaska and off our coasts.
We are not taking full advantage of these resources. In fact, because the Obama administration has been slow to approve new development, expected oil production in the U.S. has decreased by 16 percent. While we were projected to produce 850 million barrels last year, the actual production was 714 million. Drilling rigs have moved to Brazil and Egypt because of uncertainty over approval processes.
Finally, we have to promote innovations in both renewable and fossil fuel energy sectors. Carbon capture technologies could greatly reduce or even eliminate emissions from power plants. Smart grid technologies have the possibility to make distribution of electricity more efficient, regardless of how it is generated.
I believe that immediate action on all three parts of this initiative could help calm energy markets. They are not all short-term solutions, but a solid plan will give the markets confidence. We rely on gasoline for transportation, but we don't have to rely so much on foreign nations for this resource. Throughout this Congress, I'm going to work to reduce this dangerous dependence and stabilize prices.