CAP’s Weiss Testifies on Rising Gas Prices Before the House Subcommittee on Energy and Power

Washington, D.C.–(ENEWSPF)–March 7, 2012. The Center for American Progress today released the testimony of Daniel J. Weiss, Senior Fellow and Director of Climate Change Policy, before the House Subcommittee on Energy and Power on “The American Energy Initiative: A Focus on Rising Gas Prices.” An excerpt:

The recent spike in oil and gasoline prices is not a first-time event. It has occurred twice previously in the past four years. Fortunately, we are better prepared to withstand its impact because we are using less oil due to the vehicle fuel economy standards adopted by President Barack Obama in 2009. The next improvement to double fuel economy standards will reduce oil use by more than 2 million barrels per day. Model Year 2025 cars will go twice as far on a gallon of gas, and will save their owners $8,000 in lower gas purchases compareed to 2010 cars. We are also producing more of our own oil. For the first time since President Bill Clinton, the United States is producing a majority of the oil we rely on to power our vehicles and economy. We are less reliant on other nations for oil and send less of our treasure abroad.

This progress, however, cannot mask the fundamental fact that we rely too much on a single fuel and are thus extremely vulnerable to volatile prices or international events beyond our control. To end the oil price rollercoaster that inflicts real damage to our economy and middle class, we must dramatically curtail our reliance on oil as our primary transportation fuel. As you know, high oil and gasoline prices slow economic growth and take a real toll on families’ already-strained budgets. Unlike many other commodities, demand for gasoline does not significantly decrease even as prices increase because most people cannot quickly and significantly reduce the amount they drive by changing jobs or buying a new car.

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We need a long-term “all of the above” strategy that generates long-term investments in modern fuel economy standards, alternative fuels, and public transportation that can reduce our vulnerability to future oil and gasoline price spikes … Unfortunately, the pending House transportation bill would disinvest in public transportation—something that’s essential to us using less oil and protecting families from high gasoline prices. While withholding investments for alternatives to oil, we continue tax breaks for Big Oil companies even though the price of oil is nearly double compared to when President [George W.] Bush said that such support was unnecessary. This includes tax breaks for the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—which made a record $137 billion in profits in 2011 while they produced 4 percent less oil. It makes little sense to continue $4 billion in annual oil and gas tax breaks for oil and gas companies. Instead, we should invest these revenues in helping Americans reduce their oil and gasoline use and save money.

There is a proven tool to provide some temporary relief now from high prices. Selling a small amount of oil from the Strategic Petroleum Reserve in coordination with sales from International Energy Agency reserves would boost world oil supplies. Such a sale has occurred under the last four presidents and has lowered oil and gasoline prices every time. This can cut prices and burst the “bubble” caused by Wall Street speculators driving up oil prices for a quick profit. Finally, the Commodities Future Trading Commission must finalize the position limits on large Wall Street speculators to reduce their impact on volatile, high oil prices. Today’s hearing on high gasoline prices is like the rerun of a bad movie. It’s up to you to change the finale. Congress must slash oil dependence by supporting the doubling of vehicle fuel economy standards, investing in alternative fuels, rejuvenating our public transportation infrastructure, and paying for it by ending Big Oil tax breaks. The American people would give this ending a standing ovation.

Download the full testimony (pdf)