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Information In This Section
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Rising Gas
Prices In Vermont And Across The Nation
The price of gas has increased
100 percent in the last five years, and Vermont families,
businesses, and farmers are being hit hard by the rise in gas
prices. These record high prices mean Vermonters are
paying on average 100 dollars a week to fill their tanks with
fuel - while oil companies are reporting record profits and
making little effort to curb the price of gas.
With gasoline prices nearing
three dollars per gallon for Vermonters, oil companies continue
to post record profits. During the last quarter of 2005,
the following companies reported
astronomical earning increases:
Chevron posted profits of $3.6
billion; BP's profits rose to $6.5
billion; Royal Dutch Shell's |
| profits grew to $9 billion; and
Exxon Mobil's profits were a staggering $10 billion.
There's nothing wrong with corporate profits. But
hardworking American families, farmers and small businesses
should not be asked to subsidize them. The time for action
is now. Consumers need relief at the pumps. |
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rebates, or use them to build alternative and renewable fuel facilities.
Finally, Sen. Leahy is proud to lead efforts in Congress to make the
Organization of Petroleum Exporting Countries - OPEC - accountable for
its anti-competitive behavior, and to allow the United States to take
decisive action against the foreign oil cartels for the withholding of
supplies, price gouging, and other anti-competitive activities.
On April 6, Sen. Leahy joined with his colleagues to introduce the
Oil and
Gas Antitrust Act, which includes NOPEC provisions that could
offer prompt relief to consumers from spiraling fuel prices.
The bill offers the legal tools to break the back of OPEC's
monopoly power over oil supply and prices, which would
immediately deter those nations from price gouging. The Senate
Judiciary Committee, of which Sen. Leahy is the ranking member,
passed this legislation on
April 27.
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Gas prices
have increased across the nation by an average of more
than 70 cents since the November, 2006. Prices in
some parts of the country have passed $3.00 per gallon.
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Oil and
Gas Prices in Vermont:
According to the U.S. Energy
Information Administration (EIA), crude oil prices are now
trading above $65 per barrel since mid April, 2006. These
high crude prices are a major factor behind the soaring cost of
gasoline. According to the EIA, the average pump price for
regular gasoline in the U.S. was nearing $2.90 per gallon, up
nearly 70 cents from April of last year. This high cost
represents a 100 percent increase in the price of gasoline since
2001. In Vermont, according to the American Automobile
Association (AAA), the average prices for regular gasoline is
$2.85 per gallon in late April. That price is nearly 70
cents per gallon above last year at the same time, and is
quickly approaching the record prices following Hurricane
Katrina.
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The
Supply Line and Consumption: OPEC will control 50 percent of the world's oil
production by 2010, and the United States has been increasingly
reliant on foreign sources of oil since 1971 - a trend that
forecasts say will continue into the future. Without
antitrust constraints, OPEC therefore would continue to be able to
force U.S. consumers to pay ever-increasing
prices for oil if all the OPEC nations conspire together in a
unified cartel to withhold supplies to the United States.
Currently, the United States depends on overseas oil for over 50
percent of our oil supply.
When nations, or
corporations, dominate markets enough to be able to work out formal
or informal deals with others to withhold supplies of any important
resource, they can create artificial shortages to generate higher
profits, and that adds up to an unfair trade practices. Yet
that is what OPEC nations have done in the past. For example,
Vermont families saw steep increases in gasoline and heating oil
prices when OPEC would not ship oil to the United States in the
early 1970s. In that case, the supply of oil to the United
States by oil producing nations was greatly reduced, prices zoomed
upward, and there were long lines at gas stations many of which ran
out of gas. U.S. oil consumption rose 19 percent in 2004 and
continues to grow. The U.S. economy creates one-fourth of all
world-wide demand for oil. Yet our strategic reserves of oil
will only supply U.S. demand for 30 days. Other nations such
as China, whose consumption of oil went up almost 40 percent that
same year, also need more oil.
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Price Factors:
Energy experts point to a
variety of factors contributing to the high prices.
Included most prominently among these factors is that demand
remains strong while supply remains tight. Other
important factors include market speculation and the
perception of short term disruptions in supply.
Political instabilities in oil-rich regions such as Iraq,
Venezuela and Nigeria contribute to perceived uncertainties
in supply, which can leave oil prices volatile.
Reductions in demand for gasoline or oil could occur as
Americans switch to alternative energy sources such as wind
power, hydroelectric, geothermal, or engage in more
conservation activities, or use renewable fuels (such as 85
percent ethanol, fuel cells, or hydrogen). Sen. Leahy
has strongly supported research and development funding for
these and other technologies. These are solutions that
can break our long-term dependence on foreign oil, as well
as creating new industries that would strengthen the
nation's economy. |
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Gas prices in
Vermont have increased drastically since 2001, when the
average price per gallon was around $1.50. The average
price of gasoline hit $2.90 on April 25, 2006.
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But these approaches will not be
sufficient in the short run to have a significant downward
effect on the current high prices at the pump. In
light of the record-breaking profits being made by oil
companies, another option Sen. Leahy and his colleagues have
been examining is the possibility of a windfall profits tax
on oil company proceeds, which could be rebated to American
Consumers or invested in these new alternative technologies.
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Longer-Term Solutions:
Sen. Leahy is hopeful that Congress and
the Bush Administration will act soon to address the immediate
concerns about gasoline prices, but the nation needs to develop a
new national energy plan for the long-term that emphasizes a clean,
reliable, sustainable, and affordable energy policy. We need
to push for more fuel efficient cars and trucks by adopting stronger
fuel economy standards. These emission standards not only help
protect the environment, they also reduce American dependence on oil
imports. The current, decade-old standards do not take into
account new technology or the increased use of SUVs. We also
need to create incentives for more hybrid and alternative vehicles
to be build and for more Americans to drive them. Sen. Leahy
hopes Congress will adopt additional tax incentives this year to do
both. In addition, the best solution to the world's oil
dependence is a massive commitment to hydrogen fuel cells which use
water like gasoline and emit no harmful substances. While
scientists are working now on ways to use hydrogen to power cars and
trucks, the technology is likely several years away. Sen.
Leahy is committed to pressing for progress to make the United
States the world leader in research in this area.
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Statements from Sen. Leahy About Rising Gas Prices:
Your Ideas:
Sen. Leahy invites your suggestions for
new solutions that might quickly solve the problem of high gas and
heating oil prices. Please
share your thoughts
and ideas with him.
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