Report From Congress: 6/11/07

Letter

REPORT FROM CONGRESS: 6/11/07

WICKER PROMOTES MORE AMERICAN-MADE ENERGY

With gasoline prices still near $3 a gallon, the nation's energy problems are commanding renewed attention in Washington. Congressional Republicans and the Bush Administration are focused on initiatives that could lower prices at the pump and create new sources of energy to reduce our country's reliance on foreign oil.

Unfortunately, there is no quick fix remedy that will bring an immediate drop in fuel costs. The price of gasoline is dictated by market forces that are largely beyond our control, at least in the short-term. Global crude oil prices have increased, and the demand for energy worldwide has jumped dramatically, spurred by double-digit growth in India and China. Demand in the U.S. also hit a record high during the first quarter of the year, up nearly two percent over a year ago.

The Kiplinger Letter, the respected business publication, notes the sharp increases in gas prices may have reached their peak, but longer-term issues remain. It suggests Spring price hikes could become annual events. Kiplinger says refineries should be adding capacity. Instead, they are only expanding at a "modest pace," not nearly enough to match demand. Refinery capacity is stretched to its limit, and costly regulations have prevented construction of any new refineries in 31 years. From 1994 to 2003, the industry spent $47 billion just to bring existing facilities into compliance with new and ever more restrictive environmental rules. The seasonal conversion from winter to summer blends of gasoline also causes supply disruption and adds to fuel costs.

NEW, INNOVATIVE ENERGY MEASURES

In 2005 the Republican Congress passed a comprehensive energy plan that promoted more domestic exploration, development of alternative and renewable fuels, and conservation. The most recent spike in gasoline prices reinforces the urgency for action to build on these efforts with additional measures.

New energy security proposals offered by Republicans include more research on innovative technologies such as advanced bio-fuels, hydrogen power, and fuel-cells. Increasing conservation efforts could produce higher fuel standards and more cost savings from energy efficient vehicles, homes, and buildings. A third front includes the use of 21st century production techniques to make deep-ocean drilling more feasible and utilizing the nation's enormous coal reserves, including the promising coal-to-liquids process. We should also promote construction of new nuclear power plants.

We took a positive step in December by opening eight million acres on the outer continental shelf (OCS) in the Gulf of Mexico to oil and gas drilling. I support expanding OCS drilling further to tap vast energy resources here at home. Exploration should also be allowed in Alaska's Arctic National Wildlife Refuge (ANWR), which could produce 1.9 million barrels of oil per day in an environmentally-safe manner. That output is nearly the equivalent of our daily imports from Saudi Arabia.

While exploration in the OCS and ANWR alone will not bring energy independence, each barrel of oil produced there would offset a barrel of oil imported from foreign and often unreliable sources.

NATIONAL, ECONOMIC SECURITY AT STAKE

The solution to our energy problem lies in a comprehensive approach that will generate more American-made energy from wide-ranging sources. This is a matter of economic security and national security, and it should have the attention of a bipartisan Congress and the President.

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