In response to the impact of soaring gas prices, many of our working families and farm families are being forced to make difficult decisions.  For a family operating on a tight budget, a $20 increase in one’s gas budget can make a huge impact. It can be the difference between buying a much-needed pair of shoes for a child, or not. It can be the difference between taking the family out for a monthly pizza dinner, or not. 

To understand why gas prices have skyrocketed is to understand the economic influences that impact crude oil. Given that oil is a globally-traded commodity, the domestic price of crude oil is largely impacted by internationally-driven forces. The organization tasked with making major decisions relating to oil production is the Organization of Petroleum Exporting Countries (OPEC), and in the past 18 months, OPEC has failed to raise at a reasonable rate production quotas mandated in 2002 – causing the price of crude oil to skyrocket. Additional factors leading to the rise in oil prices include disruptions in oil production among major exporters including Venezuela and Iraq, a substantial increase of oil consumption in China, and a decline in the value of the U.S. dollar – the currency used to trade oil in the world market – compared to other major currencies.  

On the national front, domestic refining capacity has declined over the past two decades in both the number of refineries in operation and in the total oil produced by those refineries. To cut costs, refineries have been operating with lower inventories of both crude oil and gasoline, which has reduced their ability to meet unanticipated market demands. These factors have ultimately led to an increase in gasoline prices.  

We simply must reduce the high price of gasoline and diesel fuel. Fluctuating and unpredictable energy costs not only make it difficult for businesses to budget correctly, but at the same time, for most businesses energy costs are not a variable expense. The outcome means many of these small businesses are forced to pass on these high-costs to consumers, causing a negative, trickle-down effect on our overall economy. This fact is further verified by recent statistics from the Labor Department, which found that the consumer price index in February rose by .4 percent, largely due to a rise in energy costs. 

I am looking forward to working with my colleagues on the House Committee on Energy and Commerce to pass legislation that addresses these soaring costs. This starts by passing a comprehensive Energy Bill that truly addresses our nation’s energy needs. We must pass a bill that supports expanded research and development of alternative fuel sources such as ethanol and bio-diesel, thus reducing our reliance on raw oil.