Unit 6 Project: Gas Prices

By Zeb White, 6th period

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Gas Prices affect everyone

The cost of a gallon of gas has dramatically increased in recent years. In 2008, gas prices were averaging around $2 a gallon. Today, it has increased over 60% throughout America. This is detrimental to the US public and to the economy. Volatile gas prices have taken center stage in the media this year as the national average for a gallon of gasoline has recently topped $4. Political unrest and increased demand during the summer driving season could push prices even further. At the individual level, higher gas prices mean that each of us will pay more at the gas pump, leaving less to spend on other goods and services. But higher gas prices affect more than just the cost to fill up at the gas station; higher gas prices have an effect on the broader economy.

What options do we have to solve the problem?

There are many ways to lower gas prices. Here are a few options:

1. Lift offshore and onshore exploration and drilling bans

2. Approve Keystone XL

3. Require timely environmental review

4. Permitting process

5. Issue leases on time

6. Allow development of oil shale

7. Stop the land grab

8. Implement 50/50 revenue sharing

9. Prohibit greenhouse gas and Tier 3 gas regulations

10. Repeal the Renewable Fuel Standard (RFS)

What is the best solution?

We need to address all of the problems and solutions to this dilemma. Both Congress and the administration have failed to remove obstacles that would allow the market to respond more effectively to high oil prices. Here are 10 actions Congress can take to help lower gas prices in both the short and long-term.

1) Lift offshore and onshore exploration and drilling bans. The United States is the only country that has made a majority of its'\ territorial waters off limits to oil exploration. The government needs to open waters and unblock prohibited areas onshore.

2) Approve Keystone XL. Congress should recognize its authority to regulate commerce with foreign nations, accept the State Department's conclusion that the project is environmentally safe, and approve construction of the pipeline.

3) Require timely environmental review. The White House Council on Environmental Quality estimates that an environmental impact statement to approve a larger drilling project on federal lands should take one year to complete, but this process has taken, on average, five years since 2005. It could be done faster than 12 months. Congress should place a 270-day time limit for energy projects on federal lands.

4) Speed the permitting process. The processing time frames for Application for Permit to Drill extend well beyond the 30-day time limit stipulated by the Energy Policy Act of 2005. Congress should require the Department of the Interior to honor the law's deadline unless the Interior finds fault with the application.

5) Issue leases on time. Rather than implementing an efficient leasing process, the Interior Department added three additional administrative regulations to the leasing process in January 2010. Congress should remove these additional levels of red tape and stipulate that if the Interior fails to issue the lease to the winning bidder within 60 days, the lease should be issued by default.

6) Allow development of oil shale. The U.S holds the largest known reserves of oil shale in the world. While the technology is still developing and environmental considerations need to be taken into account, Congress should make permanent the 2008 Department of Interior guidelines for oil shale development so companies can pursue this resource.

7) Stop the land grab. The Interior Department's land grab — unilaterally and arbitrarily classifying federal land areas as "Wilderness" or "Wild Lands" — will not only restrict access to new drilling areas but also prevent production on existing leases. Congress should block these attempts and require any DOI designation to require congressional approval.

8) Implement 50/50 revenue sharing. States receive 50 percent of the profits generated by onshore oil and natural gas production on federal lands, and Congress should apply this allocation offshore as well.

9) Prohibit greenhouse gas and Tier 3 gas regulations. Reducing greenhouse-gas emissions, and simply reporting on emission outputs, is extremely costly. It will also drive up refining costs and have no measurable impact on global temperatures. The proposed Tier 3 gas regulations to lower the amount of sulfur in gasoline could add 6 cents to 9 cents per gallon to the cost of manufacturing gasoline. Congress should prohibit the implementation of these regulations.

10) Repeal the renewable fuel standard (RFS). Very soon, refiners will be fined when the amount of ethanol mandated exceeds the amount that can be refined for use. In 2011, the EPA fined refineries $6 million because they could not meet the minimum volume requirement for cellulosic ethanol; no companies have been able to make it commercially viable. The ethanol mandate has been a disaster.

The federal government should reform the framework for companies to extract and develop America's untapped resources if a commercial interest exists.