Read the full column here.
Washington, D.C. – Today President Barack Obama is expected to speak about high oil and gasoline prices in Florida, including the resultant strain on families’ budgets and slowing of economic growth, and the Center for American Progress released “Time for the Oil Reserves? President Obama Should Tap the Strategic Petroleum Reserve to Lower Gasoline Prices.”
There is one proven tool for temporary reductions in oil and gasoline prices, and can lower prices to help middle-class families: selling oil from the Strategic Petroleum Reserve. There have been reserve oil sales under every president since 1991. These sales reduced oil prices from 10 to 18 percent, and lowered gasoline prices from 5 to 19 percent.
For instance, In June 2011 the Obama administration sold 30 million barrels of reserve oil, and International Energy Agency nations sold 30 million barrels from their reserves. Over the next three months, the price of West Texas Intermediate crude oil dropped by 17 percent, while the price of gasoline fell by 6 percent.
Instead of advocating for a tool that can cut prices and help families, conservatives propose measures that could benefit Big Oil instead, such as:
- Approve the Keystone XL pipeline to bring dirty oil sands from Canada to the Texas Gulf Coast. Time magazine concluded that, “Keystone would have little immediate [price] effect.”
- Expand offshore oil drilling into currently protected areas along the Atlantic and Pacific coasts. The Energy Information Administration found that this would have little impact on oil prices or supply.
- Drill for oil in the Arctic National Wildlife Refuge in Alaska, even though it would take10 years to produce any oil.
- Suspend the 18-cents-per-gallon gasoline tax, which would reduce funds for badly needed highway repair and transit projects and cost jobs.
- Waive the summer pollution reduction requirements for gasoline in metropolitan areas with severe smog problems. This would reduce gasoline costs by only a few cents per gallon but would increase deadly smog.
Under President Obama, the United States is producing more oil — enough to meet more than half of our needs for the first time in 15 years. We have more oil rigs than the rest of the world combined. There are 75,000 more people working in oil production.
His new, modern fuel economy standards will also help families cope with higher gasoline prices over the long run. By 2025 cars and light trucks will go twice as far on a gallon of gas and will save more than 2 million barrels of oil per day. The improved standards will also save drivers $8,200 in lower gasoline purchases over the life of their vehicle compared to 2010 standards.
High gasoline prices impose real costs on middle- and low-income Americans. President Obama’s plans to increase oil production while improving fuel economy for vehicles will provide real long term relief. For an immediate respite from high gasoline expenses, however, history shows that selling a small amount of oil from the Strategic Petroleum Reserve will lower prices.
Read the full column here.
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To speak with Daniel J. Weiss, please contact Christina DiPasquale at 202.481.8181 or [email protected].
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