High Gas Prices

Aug. 31, 2005

This week, as I was making my way around my Congressional District, which spans all of the Upper Peninsula and northern Lower Peninsula, I stopped to fill up my gas tank only to find that since
I had left that morning, gas had gone from an already high $2.54 to a shocking $2.79 per gallon.
Northern Michiganders have been patient with these outrageous gas prices for the most part, but with the latest gas spikes of between $.20 and $.40 cents per gallon each of us and our small towns that rely on tourism to sustain their local economies can no longer afford to remain silent.
Whether it’s docking at a harbor resort, touring the U.P. in an R.V., or taking the Sea-Doo or four-wheeler out for a spin, people are thinking twice about summer recreation plans fearing the cost of a fill-up.
With tourism as the largest industry in the region during the summer months, gas prices have taken a toll on small businesses this year. Additionally, many Northern Michigan residents who must commute to distant communities for work find themselves putting in the first hour or two just to pay for the gas to and from their job.
The fact is we rely on gas to fuel our cars, homes and economy, so we’re forced to pay the price. Like you, I find myself at the pump feeling completely helpless to stop the seemingly endless rise in cost. Before you angrily fork over a stack of bills to the clerk behind the counter (it’s not their fault) it might be helpful to ask how the situation has spun out of control causing gas to jump 32 percent in one year alone.
There are several reasons for this increase and they all essentially point to the same place. A major contributor is President Bush’s domestic priorities- or lack thereof- toward freeing the U.S. from foreign dependence on oil. During his 2000 campaign, President Bush promised to “jaw-bone” OPEC to bring down the price of oil coming in from abroad, yet over the past five years his administration’s energy policy has done nothing to address the price
at the pump.
More and more often we hear and read in the news about oil rationing in Iraq and terrorist threats in Saudi Arabia. Due to poorly planned foreign policy and mismanaged international diplomacy, America’s policies have created major instability in the oil rich regions of the world.
The insurgency in Iraq understands this vulnerability and is now targeting global oil reserves. Due to initial U.N. conflicts with newly elected President of Iran, Mahmoud Ahmadinejad, Iran- OPEC’s second biggest producer- could withhold barrels of oil as a means of negotiation, knocking a major leg out from under the U.S. economy. Furthermore, because of an anti-U.S. foreign policy stance, Venezuela’s President Hugo Chavez has partnered with Communist Cuba to work against America. Chavez, who controls 14 percent of the U.S. oil supply, could easily worsen our current gas crisis if the administration continues to aggravate international relations.
Oil companies also recognize the blatant risk we face due to the anti-American sentiment on the global spectrum. In fact, analysts say that on average an additional 10 to 15 dollars are added to each barrel of crude oil sold on the global market based on what’s called a “terrorism risk premium.” In other words, the oil industry is betting on the fact that there will be another terrorist attack affecting oil production and output into the market. This additional fee helps offset losses if production is halted because of an attack, but in the meantime no one is offsetting the cost to the consumer.
The most frustrating part about this fuel crisis is that some legislators have been working on ways to curb the
pain at the pump with no avail. Earlier this year, the House Energy and Commerce Committee voted to accept my amendment to the Energy Bill to suspend deliveries of oil to the Strategic Petroleum Reserve (SPR) until oil fell below $40 per barrel
for two consecutive weeks on the New
York Mercantile Exchange. The SPR is a reserve that can be used in a time of national crisis.
Oil is currently pricing at over $66 per barrel, when only one year ago the price was below $35 per barrel. The suspension of oil delivery to the SPR would put additional barrels of oil out into the U.S. market to help stabilize our oil supply and provide some relief at the pump for consumers.
The reserve is already filled to 98 percent capacity with 688 million barrels- the highest it’s ever been. Stopping delivery to the reserve would not hurt our energy security in the least. It just doesn’t make sense to keep filling the SPR when oil and gas prices are sky-high.
Unfortunately, my provision to stop delivery to the SPR was stripped from the Energy Bill by the Senate during the conference and was replaced with language urging the Secretary of Energy to consider whether or not he should suspend deposits to the SPR.
I call on the White House to do the right thing by fulfilling their promise to step up and protect American consumers. The President and the Secretary of Energy have the power to divert domestic barrels to increase oil supply and that will directly affect the crunch at the pump. They
could also release oil from the SPR to help ease gas prices, just as Presidents Bill Clinton and George H.W. Bush did during their tenures. President George W. Bush refuses to do so.
In the meantime, there are those of us who do not trust that these recent trends will change if left to the current administration. If the Republican Congress and White House do not want to work toward ways of
bringing down the price of gas, they at least owe the country an explanation as to why these gas prices continue to soar out of anyone’s control.
In order to ease the squeeze on the middle class, we need responsible leadership that will do more than talk about improving the economy on Wall Street. I will continue to explore ways to move the administration to lower the price of all our energy needs and to help keep money in the pockets of those living on Main Street, Michigan.

To monitor the lowest and highest gas prices in the state, visit
www.michigangasprices.com