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Posts Tagged ‘gas prices’

Plenty of Blame to Go Around

March 19th, 2012


This piece originally appeared in National Journal.

Who’s to blame for rising gas prices? No one. And everyone. The recent spikes we’re all seeing as we drive around are unavoidable. They are the consequence when there are no other widely available options to fuel our cars, trucks, and airplanes. As we noted in a recent paper, Why We Face More Pain at the Pump, current price spikes are the result of worries about renewed conflict in the Middle East, a growing global economy, and refineries going offline.

On the Middle East:

The oil market is spooked. Why? Tensions with Iran over their continued development of nuclear weapons, and Iran’s threats to cut off oil to Europe and close the Strait of Hormuz. Closing the Strait would shut off the shipping route for 20% of the world’s oil, dramatically curtailing supply. [Read more about the possible effects of war with Iran in our recent report Keeping Our Powder Dry] In 2011, the civil war in Libya had a similar impact on oil prices, despite the fact that Libya only accounted for 2% of global oil supply.

On the global economy:

Through the end of 2011, markets were frightened by the prospect of a Greek default pulling Europe, and the world, into a deep recession. This helped keep oil and other commodity prices down. In mid-February 2012, the European Union agreed to provide Greece an additional round of bailout funding to meet its debt obligations. With an economic crisis seemingly averted, economists anticipate that the global economy, and the demand for oil, will begin to grow more quickly in 2012.

On refineries:

Every year, domestic refineries take a time-out in the spring to perform maintenance and switch to a summer blend of gas. This year, a host of refineries began maintenance early, disrupting gas supplies earlier than usual. At the same time, several refineries are closing because high oil prices have destroyed their profit margins.

Our nation must begin to provide alternatives to gasoline. Whether the option is natural gas, electricity, or biofuels, forcing oil to compete for consumer dollars, would drive prices down. Will the price spikes caused by Middle East hostility, economic recovery, and refinery shortfalls be enough to move Washington to act? Only time will tell. I for one will be buying a Volt or Prius as soon as I can.

Ready-to-Tweet: Recent Actions to Reduce the Burden of Gas Prices

March 15th, 2012


Increasingly, important and complicated policy debates in Washington are being reduced to sound bites or even tweets. The debate over skyrocketing gas prices is no exception. As we outlined in a recent memo, there is not much that can be done to reduce the immediate impact of high gas prices. There is, however, a lot that can be done to kick the oil habit once and for all over the long-term. We’ve included a list of steps the government has taken over the last three years below, in a handy Tweet-able format.

Kicking the Oil Habit with Alternative Fuels

The US SuperTruck program will save trucks $15,000 in fuel costs every year

Increased tax breaks to families and companies that buy alternative fuel vehicles up to $10000 from last year’s $7500

Feds getting off of oil: By 2015, 100% of government vehicles to run on alternative fuels

Save money at the pump, go electric: Feds and private sector to develop car battery that’s ½ price, 300 miles/charge

4 commercial biorefineries are 1 year ahead of schedule. Will produce nearly 100 million gallons of biofuels/year

Recovery Act grant recipients purchased 1,286 buses and vans powered by clean tech like biodiesel and natural gas

Increasing Domestic Oil and Gas Production

Domestic oil production has increased every year President Obama has been in office

Since 2009, the United States has been the world’s leading producer of natural gas

Currently, the U.S. has a record number of oil and gas rigs operating – more than the rest of the world combined

We have already cut net imports of oil and gas by ten percent – 1 million barrels a day – in the last year alone

Last year the US was a net exporter of refined petroleum products for the first time in sixty years

In 2008, US imported 11 million barrels of oil/day. By end of last year, that number fell to 8.4 million barrels/day

Natural Gas STAR Program encourages companies to adopt safe practices and technologies to reduce methane emissions

Natural Gas STAR partners reported domestic emissions reductions of 86 Bcf, worth over $421 million, in 2009

Rapid development of oil and gas spurred by shorter lease terms

The Administration has tied lease-extensions for oil and gas to lessee investment in exploration and development

New Admin proposal would reward rapid development of oil and natural gas through new royalty structures

Increasing Fuel Efficiency

Higher fuel standards mean filling up less often – by middle of next decade cars will average almost 55 miles/gallon

The Obama Administration has put in place the first-ever fuel economy standards for heavy-duty trucks

New CAFE standards for passenger vehicles will save drivers more than $8000 in fuel costs

Heavy duty fuel economy standards will reduce oil consumption by over 500 million barrels

There’s a Silver Lining in the Gas Price Gloom

March 13th, 2012

by and

With gas prices hitting record highs rarely seen since 1918, it’s understandable that pundits and politicians are looking for someone to blame. Headlines from recent polls have all but shouted that President Obama’s popularity is taking a hit from bad news at the pump. The reality is, however, that voters are a lot more sophisticated than they often get credit for. In fact, the data suggests that voters are taking a much more realistic position about how high gas prices are impacting them and who is, and is not, to blame.

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Election Offers Opportunity

January 10th, 2012


This piece was originally posted in National Journal

This year’s election is an opportunity to ditch the snake oil and talk straight to voters about gas prices, an issue which keeps taking a bigger bite out of Americans’ budgets. After a decade of hearing about short-term solutions that are only as good as the last price on the gas station sign, the driving public is ready for something different; putting us on the path for a real choice in the fuels we use offers that.

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Gas Prices: Fool Us Fourteen Times, Shame on Us

May 26th, 2011


The gas price debate in the U.S. is a lot like the movie Groundhog Day. Fourteen times over the last 25 years, we have woken to gas prices in the United States have jumped by at least 5% between the months of March and June. Each time, Americans feel more and more of a pinch on their wallets. And each time, policymakers roll out the same stale and ineffective solutions. While calls for more drilling or releasing the Strategic Petroleum Reserve may make for good sound-bites, these proposals would do little if anything to reduce oil prices.

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Great Disconnect, Act Two

April 25th, 2011


What just happened? The mood of the country has suddenly taken a nosedive in the past month.

In the April CBS News-New York Times poll, 70 percent of Americans say the country is off on the wrong track. That’s the highest figure since President Obama took office. The number who say the economy is getting worse jumped from 26 percent in March to 39 percent in April – the highest level of pessimism in two years.

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