by Amy Dominello/Media General News Service
Published: Wed, July 16, 2008 - 10:01 am CST
Last Updated: Mon, August 11, 2008 - 3:49 pm CST
BY AMY DOMINELLOMedia General News Service
WASHINGTON – If only Congress could harness the energy it uses talking about gas prices to reduce them, gas prices might go down. Since that’s not an option, observers say it does not seem likely that Congress will do much to reduce gas prices this summer – or even this year – despite the rhetoric on Capitol Hill. “Something this substantial does not happen in an election year,” said Mike Pina, director of public relations for AAA. “No clear solution has made itself known.” Here’s a look at some of the factors that affect gas prices and what Congress could do.
Drilling
President Bush lifted an executive ban on offshore drilling Monday and called on Congress to remove its ban. While it would take years for the impacts of offshore drilling to be felt at the pump, Bush said it would put the nation on the right track toward reducing dependence on foreign oil. Polls show that with gas at a national average of $4.11 a gallon, Americans have become more open to the idea of offshore drilling. House Republicans say they have bi-partisan support to pass legislation to enable offshore drilling but the Democratic leadership won’t bring it up for a vote.
Democratic leaders are strongly opposed to drilling offshore and in places like the Arctic National Wildlife Refuge. More effective, they say, is legislation to ban oil companies from drilling on additional public land until they’ve actively sought petroleum on land they currently lease for oil production. Democrats want to see more drilling where it is already permitted, such as a petroleum reserve in rural Alaska. But Mark Kibbe, director of federal relations for the American Petroleum Institute, the oil industry’s trade association, said some of those areas are more difficult to drill in because the oil is spread out over a wider region. Senate Republicans are also pushing for exploration in the West -- Colorado, Utah and Wyoming.
Oil Reserves
House Democrats said Tuesday they intend to bring energy legislation to the floor this week. Rep. Chris Van Hollen, D-Md., said part of the package will likely include a provision to tap into the country’s Strategic Petroleum Reserve. That, he said, could drop the price of oil within 13 days and allow the country to buy back reserves at lower prices. But President Bush said Tuesday he opposes tapping the oil reserves.
Speculators
Some in Congress believe a greater oil supply could help reduce the speculation on unregulated energy future markets that is driving up prices. Estimates vary on how much speculators drive up the price of oil. Speculation buyers are common for commodities such as oil and it’s simply an issue of supply and demand, said Barry Worthington, executive director of the U.S. Energy Association, a group of public and private energy-related organizations, corporations and government agencies. Speculators buy oil assuming the prices will continue to go up, Worthington said.
The airline industry, which buys oil speculatively, is urging Congress to crack down on speculators. The industry believes that’s the fastest way to get oil prices under control. Several members of Congress have introduced legislation to further regulate speculators, and House Democrats may include it in their energy legislation.
Conservation
Democrats and Republicans in Congress agree that the country needs to reduce its dependence on foreign oil. One way to reduce consumption in the near future would be to lower the speed limit on Interstates to 55 mph, Worthington said. That, combined with other conservation measures, such as telecommuting, could reduce fuel usage by 5 percent or 10 percent, he said. Sen. John Warner, R-Va., has asked the Department of Energy to look into the issue. When speed limits were dropped in the mid-1970s, fuel consumption decreased 2 percent, he said.
What will happen?
A shortened election-year calendar means Congress has little time to take action, possibly less than 30 legislative days. “I don’t think they’re going to do anything and it’s as simple a thing as the calendar and the clock running,” Worthington said. There is little bipartisan consensus on the issue, he said. But members of Congress may be more inclined to pass legislation once they hear from their constituents over the August break. “In the fall, you may have a different attitude,” he said.
Contact Amy Dominello at 202-662-7671 or adominello@mediageneral.com
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