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OPINIONS
Charlie Wilson: Let's get the real reasons gas prices are so high
The No. 1 thing people want to discuss with me is the price of gasoline. With gas prices up 130 percent in Ohio since 2001, I know working families and businesses are hurting badly.
There is no magic bullet, and I believe that both long- and short-term solutions need to be examined.
Short term: Consumers need an immediate break from crushing prices at the pump. This week Congress passed H.R. 6022, the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008. If signed into law, the measure would suspend the fill of the Strategic Petroleum Reserve (SPR) through the end of the year as long as the price of crude oil remains above $75 per barrel.
This is good common-sense legislation. The SPR is 97 percent full. That's enough to meet our security needs. Filling the SPR takes 70,000 barrels of oil off the market each day. If you put that oil into the market, experts project this could lower gas prices by 5 to 24 cents per gallon. In 2000, just the announcement of an SPR moratorium dropped oil prices in the market from $30 a barrel to $20.
I hope the President signs the bill. I fear he won't. Democrats have been calling for him to stop filling the SPR to lower gas prices. He recently said that "the cost-benefit analysis" of immediate action for consumers did not persuade him.
Long term: Unfortunately, like you, I have more questions than answers when it comes to why gas is so expensive. As we look for long-term answers, I believe it's important that we start cutting through the smoke and mirrors and not swallow the old argument that this is simply a situation where supply is not keeping up with demand.
The Energy Information Agency says just the opposite is true. With higher inventories and reduced demand, how can prices still have shot up to nearly $4 a gallon?
At a recent briefing held by my colleague Bart Stupak of Michigan, I was particularly concerned to find out that as our truckers are hurting for diesel fuel, our refineries have been shipping 93,000 barrels a day to Western Europe and 182,000 barrels a day to Latin America. Why are we shipping it overseas when we need it here?
Many people who call me, write me or stop to talk to me at home want to know why there aren't more refineries. Like many of you, I believed that the government must be making it too hard to build refineries.
But, during Rep. Stupak's briefing, I learned of internal documents from Mobil, Chevron and Texaco from 1995 and 1996 that specifically advocate that these companies limit domestic refining capacity in order to drive up prices.
Finally, many people want to know why more oil isn't being drilled. I'd like to know why of the 42 million acres of federal land currently leased by oil and gas companies, only about 12 million acres are actually being drilled to produce oil and natural gas.
In addition to supporting alternative energy sources, like coal-to-liquid fuel, I argue that a long-term solution to protect us from out of control gas prices is to have a good watchdog in place. It is clear to me that increased transparency and oversight are needed as our energy supplies are collected and brought to market. I'm co-sponsoring legislation that will do just that.
Like you, I'm fed up with the high price of gasoline.
Charlie Wilson, D-Ohio, represents Ohio's 6th District in the U.S. House of Representatives.
