Every week, 2,000 - 3,000 Second District residents write to me about the issues pending before Congress, and I work hard to respond to each person as promptly and thoughtfully as possible.  On this "Letter of the Week" blog, I highlight constituent letters that are of general interest.  If you'd like to share your own views, please feel free to e-mail me at any time!

Dear Nancy,

I recently received your energy pamplet in the mail and I had a few questions regarding the Artctic National Wildlife Refuge. Are you in favor of drilling in ANWR? I have heard different numbers about how much oil is actually there and how long it will last. What I do know is that Gas prices are too much and we need something to be done about it.

Thank you for taking the time to read this.

Bill from Manhattan, KS.

Dear Bill,

Thank you for contacting me to share your views on ending our energy crisis through offshore drilling and increasing our oil refinery capacity. I appreciate hearing your thoughts on this matter.

I hear from many Kansans that support drilling to end our dependence on foreign oil. I certainly agree that our economy is too reliant on energy resources that are found outside of our borders. In fact, I have supported legislation to allow drilling for natural gas resources off of our nation’s coasts. If we are to increase commerce within our own country, develop a safer way of fueling our energy needs and break our dependence on foreign oil, I think that further evaluation of proposed drilling off of our coasts is warranted.

As a former employee of the Environmental Protection Agency (EPA), I am also aware of the concerns that come with drilling for oil in fragile environmental habitats. I appreciate the natural habitat of our coastal waters, and I believe that we must work to preserve these for our wildlife and our enjoyment.

The truth of the matter is that there is no overnight fix that will drastically reduce the prices we all pay at the pump. Oil or natural gas drilling does not have an immediate impact on the marketplace because it can take more than 10 to 15 years before product is actually produced. Increased drilling also does not guarantee reduced prices. Since 2000, the number of wells drilled in the U.S. has climbed about 66 percent – from 3,000 to nearly 5,000 – while the price of gasoline has more than doubled under the Bush Administration from $1.47 per gallon to $3.56 per gallon. Domestic oil is also much more expensive to find and produce than oil we import from overseas.

I have also heard from Kansans about increasing our refining capacity. I certainly believe that the U.S. must expand our refining capacity. Since 1980, more than 200 U.S. refineries have been closed, and a new refinery has not been built since 1976. Incredibly, the oil companies are not even fully using their current oil refining capacity! According to the Energy Information Administration’s statistics, over the past few months, the U.S. oil refineries were operating at roughly 85% of their capacity. Experts in the Department of Energy and the non-partisan Congressional Research Service are unclear as to the reason why we are not using our full capacity, but list among possible explanations an over-supply of gasoline imported from Europe. This raises questions about the oil industry as a whole. If there is an excess supply of gasoline, why are prices still going up?

One other cause for concern is U.S. refinery consolidation. In 1981, U.S. refineries were operated by 189 different companies. Today, the remaining refineries are operated by about 60 companies. For the past 25 years, more than 50 percent of the refineries have been closed, and the number of companies owning refineries is less than one-third of what it was. The Government Accounting Office (GAO) conducted a study which confirmed that these oil refinery mergers have caused higher gas prices.

Big Oil is simply trying to cut corners in terms of maintenance and upkeep of their current refineries, and instead are maximizing profits for their shareholders. A British Petroleum (BP) executive testified before Congress that cost-cutting pressures have led to a culture that discouraged preventative maintenance on refineries. Even with record profits, BP cut preventative maintenance to save money, which led to an oil pipeline shutdown in Alaska . Reduced preventative maintenance to simply cut costs and increase profits jeopardizes our strategic oil supply and risks the health and safety of workers. This was most apparent in BP’s Texas City refinery disaster that killed 15 workers and injured 180 others. Congress must take an honest look into the current refining practices from Big Oil before considering government assistance to increase refining capacity.

I have also taken some action to reduce the price of gasoline. I cosponsored and voted for H.R. 6022, which temporarily suspends purchases of oil for the Strategic Petroleum Reserve (SPR) through 2008 unless oil drops below $50 per barrel. The SPR currently holds 700 million barrels of oil, putting it currently at 97% full. According to an independent expert from the Government Accountability Office, purchasing oil for the SPR increases the price of oil because it increases market demand for oil. By suspending government purchases, we could reduce oil and gas prices and provide savings to the American consumer. Moreover, the Big Oil companies owe royalty payments to the U.S. government, but instead provide oil to the SPR instead of actually paying their royalties due. By suspending these royalty-in-kind payments, the government could earn revenue and invest in energy research and development.

I am pleased to state that the bill has passed the House and Senate. After receiving pressure from Congress, the President has agreed to suspend filling the SPR for the remainder of 2008.

If Congress is to develop a reasonable national energy policy that promotes energy efficiency and alternative resources, we must also remember to protect consumers, communities, and environmentally sensitive areas.

Thank you again for contacting me. As your representative, I both need and value your perspective. I hope you will continue to keep in touch and let me know whenever I may be of future assistance.

 Sincerely,

Nancy Boyda
Member of Congress