Gas Prices

Like you, I am concerned by the rising costs of both oil and natural gas.  It is important to understand what has driven these increases.  Uncertainty in oil rich areas, such as the Middle East, Africa and Venezuela, has created a strain on supply.  This reality is exacerbated by increasing demand from China and India, which is beginning to exceed supply.  

Generally, I believe that it is important for Congress to enact policies to deter the effect of climate change and reduce our dependence on foreign oil.  That said, I also support these measures being coupled with increased authority to permit exploration within our borders, promote alternative fuels, expand refinery capacity, and create incentives to actually deter harmful emissions.  In addition, I believe we must continue to encourage investment in infrastructure which promotes mass-transit options such as rail and bus.  Unfortunately, there is no short-term solution to this problem, as oil development and infrastructure, and even alternatives, do not occur overnight and are costly to implement.   As consumers, we must either reduce our dependence on oil or increase supply. 

Recent oil company profits, coupled with the price at the pump, have raised concern for both consumers and lawmakers.  It is important to note that these companies, like all businesses, operate in cyclical markets which are determined by supply and demand.   If consumers feel that they are being gouged, they should be aware the Federal Trade Commission (FTC), at President Bush’s direction, continues to monitor gas prices to ensure that companies are not colluding to keep prices artificially high.  Finally, legislation (H.R. 1252) has passed the House which would enact strict penalties should it be determined companies are gouging prices.   

Consequently, some in Congress have suggested temporarily suspending the federal excise tax on gasoline in an effort to ease costs at the gas pump.  Generally, I am in favor of reducing the tax burden of hard-working citizens, but remain wary at the impact that suspending the gas tax would have on our infrastructure.  As you may know, current federal gas tax revenues are dedicated to deficit reduction and the Highway Trust Fund, which maintains our nation’s interstate infrastructure and plays an important role in our economy.  Others suggest Congress enact a windfall profit tax on oil company profits.  While I also am concerned by oil company profits, I believe a tax on company profits would undermine our nation’s free market system.

Unfortunately, there is no clear cut solution to the price of gas but I remain cognizant of the impact this has upon consumers.  Again, it is my hope that we in Congress will realize the necessity to explore for oil and natural gas domestically as I believe it can be done in an environmentally friendly manner.  Finally, we must also continue to promote oil and gas alternatives.