Peak Oil News: Oil crisis needs real fixes, not gimmicks

Sunday, September 07, 2008

Oil crisis needs real fixes, not gimmicks

YumaSun


By Raul Grijalva, (D) U.S. House of Representatives, Arizona

We are all experiencing high gasoline prices. The drilling-at-any-cost proponents link high gas prices to short supply and believe that if we open up protected federal coastal waters and interior public lands such as the Arctic National Wildlife Refuge in Alaska, drilling will lower prices at the pump.

This is simply untrue; this reasoning will overturn years of protection of our coastlines and federal lands and only benefit oil companies, while those who have to decide between buying groceries and getting to work in the morning are left to continue being gouged at the pump.

Consumers need relief at the pump now; drilling in the Arctic Refuge will not provide it. It is estimated that if the Refuge were opened, peak oil production would not be reached until at least 2022, at a dismal 780,000 barrels per day. Similarly, if the waters off the coast of Florida were made available for drilling, oil production would not take place until 2012. This would do little to lower the price of gasoline.

We need immediate solutions for the price of gasoline. We cannot drill our way to energy independence and lower gasoline prices. Between 1999 and 2007, the number of drilling permits issued for the development of public lands increased by more than 361 percent. During that same time, gas prices increased. Clearly there is little connection between increased drilling and gas prices.

Further, oil companies currently hold 68 million acres of leased, but inactive, federal lands on which they can drill for oil. It is estimated that the oil in these inactive lands could produce more than six times the estimated peak production of the Arctic Wildlife Refuge. Why do we need to make more land available for drilling when so much is still not being used?

It's not a matter of not having access to enough places to drill. The oil companies themselves have admitted that they simply don't have the equipment to drill in all the places that have been opened up to them during the last 7 years of the Bush Administration.

We need an energy policy that reduces the demand for oil and regulates the oil companies. The oil petroleum industry has spent the last several decades consolidating their refineries to create greater profits for themselves. A local effort to establish a new refinery in Yuma County has been stalled for some time, not by any federal or state regulatory processes but by a lack of financing and a guaranteed source of crude oil for refining.

We need an energy policy that reduces the demand for oil and regulates the oil companies. We can effectively reduce our dependence on foreign oil by putting into place higher standards for fuel efficiency on vehicles and increasing funding for the development of renewable resources.

We need to pass legislation that stabilizes gas prices and prohibits oil generated from public lands from being exported, which is the current practice of oil drilled from the Alaskan North Slope. We also need to provide tax credits to encourage the purchase of American-made fuel-efficient and alternative-fuel vehicles.

There needs to be expanded oversight of the oil industry through the creation of Petroleum Industry Concentration and Market Power Review Commission to study industry consolidation of ownership for the exploration, production, and sale of crude oil and petroleum products in the U.S. We must not allow Enron-style commodity manipulations to be repeated by oil and gas industries and commodity traders.

We should require windfall profits tax on oil and gas, using the revenue from the obscene industry profits to promote development of alternative fuel and energy technologies. President Bush should immediately put some oil from the Strategic Petroleum Reserve into the retail supply.

The crisis at the gasoline pump offers us the opportunity to come up with innovative, environmentally friendly solutions that lower gasoline prices, and push us toward a new energy future.

The promoters of the oil industry in Congress should realize that big oil companies have, in cooperation with this administration, helped create the crisis, reaped huge profits and helped elect an administration that serves their interest. It is now time to place the American people's interest first.


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