Relief from High Oil Prices

Testimony Before the House Select Committee on Energy Independence and Global Warming

CAPAF’s Joseph Romm testifies before the House Select Committee on Energy Indepdence and Global Warming. Read the full testimony.

Like an endless rising tide, oil prices continue to climb. Beginning on January 2, when oil sold for $100 per barrel for the first time, price records have been shattered on almost a weekly basis. Some analysts predict oil reaching $200 per barrel by 2010.

There are very few immediate actions that government can take to stop the oil price escalator. We tried opening up most of the Gulf of Mexico to offshore drilling two years ago, but that failed miserably and oil prices have doubled since then. Ending the moratorium on coastal drilling, where there is realistically maybe one-fifth of the oil already available for drilling in the Gulf, offers no realistic hope of reducing oil prices, a point the Bush administration’s own EIA has repeatedly made.

But selling a relatively modest amount of crude oil from the U.S. Strategic Petroleum Reserve while promoting oil efficiency could pop the speculative oil price bubble and lower prices. Opening the SPR worked very well when President Bush’s father did it during Desert Storm.

It is hard for me to see how anyone who thinks oil prices will drop if we end the federal moratorium on coastal drilling–which might deliver 100,000 barrels of oil a day sometime after 2020–could oppose releasing 500,000 barrels a day of oil starting now. Of course, the first strategy would benefit oil companies and the second strategy would benefit the American people, so that may explain who supports which policy.

Read Joseph Romm’s full testimony to the House Select Committee on Energy Indepdence and Global Warming (CAPAF)