Rising price of gas has cause pain at the pump for families and small businesses. Democrats are committed to helping consumers with real solutions that save families money, create jobs and end our dependence on foreign oil from dangerous places.
The latest run up in gas prices is a danger to our economic recovery. Past oil price spikes have been associated with 10 of the 11 recessions since World War II.
Domestic production of U.S. oil is at an eight year high. The United States is now the largest natural gas producer in the world. But that has not helped consumers at the pump, who remain hostage to price spikes.
Who is to Blame for High Gas Prices? Just Follow the Money…
Not everyone is unhappy with higher gas prices.
Big Oil companies post record profits when you pay more at the pump. In 2012 they made $119 billion in profits and they made $137 billion in profits in 2011. For every penny increase in the price of gas at the pump, big oil makes another $200 million.
OPEC nations in the Middle East like Saudi Arabia and Iran amassed an unprecedented $1 trillion in revenue last year. American consumers spend nearly a billion dollars a day to buy foreign oil. That accounts for half our nation's trade deficit. Oil money ends up in hands of terrorists and places U.S. troops in harm’s way around the globe. Ending this transfer of wealth is an economic and national security priority.
Wall Street Speculators, exploiting fears over what might happen in response to Western economic sanctions against Iran over its nuclear program, have pushed oil prices even higher. Experts say up to 25 percent of the current price of oil may be from speculation. That would mean that consumers are paying a 73 cent speculation premium on every gallon of gasoline.
Here are FIVE REAL solutions to help consumers fight GAS PRICES:
Stop Exporting US owned Oil, Gas and Fuels.
End Tax Breaks for Big Oil.
Release Oil from the Strategic Petroleum Reserve.
Crack Down on Oil Market Speculators and Manipulators.
Innovation: Boost Vehicle Fuel Economy and Invest in Clean Energy Technologies - including electric and natural gas vehicles and advanced biofuels.
Oil Exports: Keep Americas Oil Here at Home
In 2011, for the first time in 62 years, the United States became a net EXPORTER of oil products. In fact, oil products like gasoline, jet fuel and diesel became our number one export –beating out cars.
That oil should be staying here in the United States keeping gas prices low for families and small business while and boosting our national security.
Why in the world are we exporting U.S. gasoline when Iran and OPEC still use oil as a weapon against us? Why are we exporting our fuels when we continue to export our young men and women to secure oil trade lines in the Middle East? Simple: big oil companies make more money selling our fuel to developing nations like China, Brazil and Singapore. Over the last 10 years, oil companies have made $1 trillion in profits and expanded the export of American-produced fuel.
The Keystone Export Pipeline is a perfect example. Big Oil is lobbying to set up the United States as a conduit to send Canadian oil to a foreign trade zone, where it can be exported tax-free to Latin America. Rep. Markey, Rep. Holt, and Rep. Owens have introduced legislation, The Keep America’s Oil Here Act, which will stop big oil companies from selling oil produced or transported on public lands from being sold to other nations. If it is produced on America’s lands, it says in America to help American consumers and businesses.
End Tax Breaks for Big Oil
The top five big oil companies made $119 billion in profits last year and $137 billion in profits the year before. They also received $4 billion in tax payer subsidies. That’s your money.
Against the public outcry to end these wasteful big oil giveaways, oil company lobbyists are fighting to keep these tax subsidies in place, some of which have been in law for nearly 100 years.
In addition to protecting billions in tax breaks, Republican leadership is allowing big oil companies to drill for free on public land. Right now, it’s estimated that nearly ¼ of the oil being produced on federal offshore lands in the Gulf of Mexico is not subject to any federal royalty payment.
That means that the oil companies get this oil below our public lands without paying the American people what they are rightfully owed. According to the Interior Department, taxpayers stand to lose roughly $9.5 billion over the next 10 years from this free drilling and the Government Accountability Office has estimated that the American people could lose $53 billion over the life of these leases.
Strategic Petroleum Reserve
The Strategic Petroleum Reserve has over 700 million barrels of oil – oil that was purchased by and belongs to the American people. Releasing oil from the reserve is the only proven way to drop oil prices immediately. It also sends a message to OPEC and Wall Street that American consumers will not be held hostage to fear and market speculation.
In 1991 when President George H.W. Bush tapped the SPR, it reduced prices by 33 percent. In 2000, President Clinton conducted a swap of oil from the SPR and prices fell by 19 percent. In the wake of Katrina in 2005, President George W. Bush released the SPR sending prices down 9 percent.
Congressional Democrats have led the effort to use America’s oil reserve to help ease consumer pain at the pump by introducing legislation and sending President Obama a letter.
In June 2011, President Obama announced the release of 30 million barrels from the SPR, and an additional 30 million barrels of oil from our international partners like Germany, France, the UK and South Korea. One oil trader characterized the move as "a stake in the Dracula heart of speculators."
Oil Market Speculation
Oil speculation has been a major factor in the high price of gas. Recently, Goldman Sachs told investors that as much as $20 per barrel of oil was due to speculation and NOT related to supply and demand.
President Obama has directed the Commodity Futures Trading Commission (CFTC) to crack down on oil market speculation and manipulation. House Democrats have supported Wall Street reform efforts that would put a "cop on the beat" and shine light into dark oil markets. Click here for more information on Dodd-Frank rules.
The CFTC has put market manipulators on notice, recently bringing suit against oil traders that made millions of dollars in 2008 through a scheme that artificially inflated oil prices.
In response, lobbyists for Wall Street traders have gone to court to sue to block the CFTC’s new position limits
Democrats have also called on the CFTC ton consider new limits on some Wall Street speculation. Click here for Markey-Wyden letter.
Clean Energy Technology and Fuel Economy
Boosting fuel economy for our cars and trucks means less money spent at the pump and more money in your wallet. Each $1 per gallon increase in the cost of gasoline adds nearly $500 to an average American's annual transportation fuel bill. At record-high gasoline prices, fuel expenses eat up nearly 10 percent of an average American worker's pre-tax income.
For years, Democrats have championed boosting fuel economy to save consumers money and put the US on a path to energy independence. President Obama’s has successfully pushed fuel economy policy that will ensure vehicles on the road in 2025 average 54.5 miles per gallon. This will save families $8,000 per year at the pump.
More miles per gallon also mean more jobs. Research investments are leading to breakthroughs in battery technologies, advanced biofuels. These innovations are spilling out of laboratories and into showrooms, helping to breathe new life and jobs into the domestic auto industry.
Electrifying our vehicle fleet and providing consumers with alternative fuel sources means big oil companies will no longer hold a monopoly on consumers' transportation dollars. And as prices for solar energy and other renewable sources of electricity continue to fall and deployment scales up, Americans will be able to run their vehicles on the power of the sun, the wind, and the earth's internal heat.