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Congressman
Paul Ryan
High Gasoline Costs.
I understand and share the frustration of many consumers about the high price of gasoline. Gas prices in Southeastern Wisconsin are hovering around $3 per gallon, and this is having a negative impact on both our economy and the pocketbooks of hard-working Americans. In order to address this problem, we must increase our domestic supply of petroleum and reform our outdated fuel regulations. In addition, we should also be developing new technologies that will reduce our dependence on crude oil in the future.
Addressing Our Gasoline Supply Problems.
At the fundamental level, the cause of expensive gasoline is an imbalance between supply and demand. Our society continues to demand more gasoline, but we have not increased the domestic supply of crude oil or finished gasoline. In fact, we currently import over 60% of the crude oil and 10% of the gasoline that we use, and this number is growing every year. This is extremely problematic when crude oil is trading at over $70 per barrel due to factors largely beyond our control, such as the unwillingness of the Organization of Petroleum Exporting Countries (OPEC) to further expand production, growing demand from developing countries, such as China, and turmoil in oil-producing countries like Iraq, Nigeria and Venezuela.
To address the gasoline supply problem, I support oil exploration in the Arctic National Wildlife Refuge (ANWR). Not only does ANWR possess enough oil to replace our imports from Saudi Arabia for the next 20 years, according to the U.S. Energy Information Administration (EIA), but new technology permits us to minimize the environmental impact of any exploration. In fact, ANWR exploration would only cover 2,000 acres of the refuge out of a total of 20 million acres in the refuge. Although the House passed legislation last winter that would have allowed for ANWR exploration, it was blocked in the Senate. I will continue to push forward on this issue during 2006.
We must also reform our regulatory regime to allow for new refineries to be built in the U.S. No new refineries have been built in the U.S. since 1976, and this has imposed substantial constraints on our ability to refine the gasoline that we use on a daily basis. As a result, we are forced us to import more and more of the gasoline that we use. In addition, adding new refineries to the market will lead to greater competition and help place downward pressure on prices.
In support of this position, I voted in favor of H.R. 5254, the Refinery Permit Process Schedule Act, which was considered on the House floor on May 3, 2006. This legislation would take multiple steps to cut down on the bureaucratic requirements that have prevented the establishment of new refineries. Unfortunately, this legislation failed to pass the House. I am hopeful that Congress will make another attempt to address this issue in the near future, because our limited refinery capacity is a large factor in the high cost of gasoline.
Addressing The Boutique Fuels Problem.
In addition to problems with supply, we pay more for gasoline because of an outdated reformulated gasoline policy that requires different areas of the country to use different blends of fuel to meet environmental requirements. This fragmented system results in the under-production of certain blends and allows refineries to charge more for the unique boutique fuels that they produce due to a lack of competition in the marketplace. The use of boutique fuels also causes price spikes any time that there is a supply disruption, such as a refinery fire or pipeline break, because there are few refineries that can make the special blend to cover the loss in capacity. Furthermore, areas like Southeastern Wisconsin that are required to use different fuels during the winter and summer months experience price spikes when the transition between fuel types is made.
I have been working hard to help address the boutique fuels problem since 2001. Last summer, I was able to make significant progress on this issue when legislation that I authored was signed into law by the President. My legislation begins to address the boutique fuels problem by capping the total number of fuels that are used in the U.S. and allowing for fuel waivers to be provided in the case of supply emergencies such as Hurricane Katrina. These fixes are an important first step to provide relief to consumers and to keep the boutique fuels problem from getting worse.
I am currently working on legislation to take the next step in addressing the boutique fuels problem. My new proposal, which will be introduced in the next few weeks, will actually begin lowering the number of fuel blends in existence. Standardizing the market in this fashion will improve the supply system and prevent refineries from manipulating prices to detriment of consumers. I am working hard to perfect the language and hope to have it considered on the House floor this summer.
Alternative Fuels Development.
From a long-term perspective, I support the development of alternative fuel vehicles. American automakers have already taken strides in this area with the production of cars and trucks that run on ethanol, electricity, hydrogen and natural gas. We must encourage this type of behavior to continue so that Americans can continue to enjoy the freedom of owning automobiles without contributing to our increasing demand for crude oil. Equally important, this course of action will also have many positive benefits for our environment.
Last year, I voted in favor of legislation that contained multiple alternative energy programs, including expanded research on hydrogen fuel cells and a 7.5 billion gallon ethanol program. And most recently, on May 10, 2006, I voted for H.R. 5143, the H-Prize Act. This legislation establishes a prize competition to develop hydrogen energy as a practical alternative to fossil fuel. The prize competition is modeled on science competitions of the past that proved to be highly successful, such as the Ansari-X Prize, which spurred the first privately funded suborbital human spaceflight last year. This legislation is currently pending in the Senate, and has not yet been scheduled for floor consideration. I will continue to support these types of incentives in 2006.
Price Gouging.
Finally, I recently voted in support of H.R. 5253, the Federal Energy Price Protection Act of 2006. This legislation, which passed the House on May 3, 2006, would prohibit price gouging—at any time—in the market for gasoline, diesel fuel, crude oil, home heating oil, and bio-fuels. In addition, the legislation would require the Federal Trade Commission (FTC) to come up with a definition for price gouging to standardize all of the different definitions and interpretations applied by the states. Finally, this bill would increase the penalties for any entity convicted of price gouging. We must not tolerate any instances of price gouging; especially when prices are at high level and consumers are suffering. I hope that the Senate will follow the House’s lead and act expeditiously to pass this bill.
Additional Information.
For more information on energy issues and priorities, please refer to the following
website.
Energy
Information Agency: www.eia.doe.gov
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