Congress Pushes 'Band-Aid Fix' to Gas Price Woes, Analyst Says

July 7, 2008 - 7:06 PM

(CNSNews.com) - Even as crude oil futures reached a record high of $98.62 per barrel on Wednesday due to a sharp drop in supplies, a conservative analyst criticized Congress for working on legislation that will "make gasoline supplies even tighter, all the while shedding crocodile tears for the plight of the poorest consumers."

"Instead of taking proactive steps to increase supplies, Congress has fiddled around while consumers burned what we had," said H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA), in a news release. Analysts have predicted sustained higher gas prices for years, he said.

Burnett noted that there are only two ways to reduce high oil and gas prices: reduce demand or increase supply. "Since world demand is increasing, we cannot appreciably affect demand in the short- or mid-term without the technology to separate economic growth from fossil fuel energy growth - something we just don't have yet," he said.

Therefore, national policy should focus on increasing supply, the analyst said. "Tapping new oil in the U.S. would reduce prices because it would increase supply to world markets, and the location of new oil would reduce uncertainty and price instability," said Burnett.

"Yet time and again, Congress has missed opportunities to utilize the billions of barrels of oil locked off-shore and in Alaska" in favor of short-term "Band-Aid solutions," he said.

For example, "if Congress had opened the Arctic National Wildlife Refuge (ANWR) to oil exploration back in 1990, when the issue was first debated, we would have that oil today," said Burnett.

He added that "if Congress had opened ANWR and allowed off-shore drilling as part of the energy legislation debated at the start of the Bush presidency, at least some new production would be coming online now."

And if Congress had even acted in 2005, when supply issues were again debated, "we would be at least a few years down the road toward lessening energy dependence," Burnett said.

"If Congress had taken steps 10 years ago, we wouldn't be in this dilemma now," he added.

As Cybercast News Service previously reported, the national average price for a gallon of regular gasoline jumped 14 cents last week, hitting $3.013 on Monday.

Then on Wednesday, crude oil futures surged on word that that inventories had declined by 800,000 barrels, which led House Speaker Nancy Pelosi (D-Calif.) to issue a news release of her own.

"As the price of oil surges toward an historic high of $100 a barrel - almost four times the price when President Bush took office - the 110th Congress is committed to a new direction for our nation on energy security," Pelosi said.

"For the nearly seven years of the Bush administration, the rising cost of gas and home heating oil has been a major economic stress on millions of American families," she said.

"The response from President Bush has been to promote new benefits and tax breaks for an industry already enjoying record profits," Pelosi added. "The American people, not the oil industry, need help from their government.

"The New Direction Congress is negotiating the final details on a sweeping new bipartisan energy security legislation to invest in the homegrown bio-fuels to strengthen our national security, lower energy prices, create jobs, promote energy efficiency and reduce the threat of global warming," she said.

"We will vote soon to pass this bill and send it to the president for his signature," Pelosi concluded.

But House Minority Whip Roy Blunt (R-Mo.) viewed the current rise in gas prices from a different timetable in a statement also released on Wednesday.

"If you're counting at home, gas has gone up more than 70 cents since Democrats took control in January," he said. "And if they're successful in passing their no-energy bill this winter, it'll go up a whole lot more than that."

Nevertheless, Blunt agreed that "Americans are looking to Congress to produce an energy bill that makes use of the resources and technology we have available - in an effort to deliver the most affordable energy we can to those who need it most."

"That means unlocking new supply, encouraging conservation, and promoting the research and innovation we'll need to adapt to the future," he said.

"Unfortunately, those familiar with the Democrats' 'energy' bills also understand they contain no energy whatsoever," Blunt said.

"By restricting access to energy supply here at home - and imposing new taxes on what little we have available - Democrats will be responsible for an enormous increase in price and a momentous shift toward strengthening our dependence on foreign-controlled energy," he noted.

In an email statement, House Minority Leader John Boehner (R-Ohio) agreed with Blunt and Burnett. "The law of supply and demand might as well not exist for Democrats, because it's certainly not reflected in their energy bills."

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