Pressure at the Pump Causing Cries for ANWR
Washington, D.C. – The capital this week has been noisy with talk of over 3$ a gallon gasoline prices and increasing America’s energy supply including opening the 10-02 Area of ANWR for oil and gas exploration. President Bush has commented twice in the last two weeks in policy speeches and talks with Senators regarding America’s energy crunch. In an April 25th Energy Crisis speech, Bush argued that the price of gasoline is a result of the world market and the lack of US action on meeting its demand needs with domestic resource production for the past 20 years.
The President stated, "I fully recognize that the passage of ANWR will not increase the oil supply immediately. But it's also important to understand that if ANWR had been law a decade ago, America would be producing about a million additional barrels of oil a day, and that would increase our current level of domestic supply by 20 percent. We've got to be wise about energy policy here in America. We've got to make sure that we protect the environment, but we've also got to make sure that we find additional supplies of crude oil in order to take the pressure off the price of crude, which takes the pressure off the price of gasoline at the pump.”
World oil prices are set on the free market, which buyers and sellers much negotiate. Oil is also a finite resource produced at limited rates making prices skittish when demand is high. Currently the US consumes nearly 21 million barrels of oil a day processed at refineries operating at 98-99% capacity. The demand in America for oil products has maxed out our supply rate from refineries leaving, most visibly, gasoline very vulnerable to price spikes due to any minor fluctuation in supply.
War in the Middle East, political threats from Iran, or hurricanes in the Gulf are more than enough to trigger supply crunches as we are currently seeing. However the myriad of “quick fixes” proposed by Congress returning from recent trips home where they faced price angry constituents will do little or nothing to solve the problem. As Senator Lisa Murkowski of Alaska stated, “what we are faced with is the laws of supply and demand, and Congress isn’t going to be able to repeal the laws of supply and demand.” The only way to cushion against price spikes in this tight a market is to increase supply and the best and cheapest solution to that is opening ANWR.
Energy Secretary Samuel Bodman stated recently the rising gasoline prices have reached crises state and that suppliers are not able to meet demand. He predicted that they would not be able to for a few years to come. These comments have led to the White House Chief of Staff Josh Bolten to state that consumers could be faced with high gasoline prices for several years to come. Even Secretary of State Condoleezza Rice commented last week that the US seriously needs to get away from “the trap” of oil dependence as soon as possible.
Recent events off the shores of Cuba with the Chinese leasing subsurface rights there when such activity is banned (120 mile moratorium on offshore drilling by Gov. Jeb Bush) have exacerbated the irony that the 10-02 Area of ANWR on America’s home ground is not already leased. This sort of tapping of a finite resource by foreign powers so close to home is new America and is, as Myron Ebel of the Competitive Enterprise Institute stated today at a House energy forum, “a good thing” and a wake up call to America.
If America won't tap its resources and support its energy demand, foreign powers are more than willing to help themselves to theirs and fuel their own economic growth; even if it means doing it on America’s doorstep. Ironically Chinese drilling for oil in Cuba should it take place will be within 100 miles of the Florida coast.
A number of organizations such as the Heritage Foundation, the National Association of Manufacturers, and numerous regional papers have come out with opinion pieces supporting the opening of the 10-02 Area of ANWR as a responsible way to address the national energy situation. For further analysis of the current situation on Capitol Hill with regard to energy and ANWR see the following:
A good analysis of the energy situation in America is presented by Ben Liberman of the Heritage Foundation.
http://www.heritage.org/Research/EnergyandEnvironment/wm1058.cfm
The National Association of Manufacturers web blog on energy and ANWR .
http://blog.nam.org/archives/2006/05/one_more_reason.php
Washington Times recent editorial on the energy crisis
http://www.washtimes.com/op-ed/20060503-092718-4169r.htm
http://washingtontimes.com/op-ed/20060503-092718-8251r.htm