GAS PRICES:
A Memorial Day tradition -- messaging on pump prices
You can almost write the pre-Memorial Day news releases from memory: "As the summer vacation season begins and gas prices keep rising, it's time to rethink America's energy policy."
But this year's holiday messaging, coming on the heels of months of lobbying around high gas prices, seem to be lacking a key ingredient: ideas to lower the cost of filling up at the pump that could garner bipartisan support and change the status quo.
What did emerge this week as Washington prepared for the summer driving season were louder replays of the same prescriptions for gas prices. Environmentalists, liberal advocates and many Democrats called for an end to oil industry tax breaks, an opening of the Strategic Petroleum Reserve, a crackdown on oil speculators and better fuel economy standards for cars.
Republicans joined the fossil fuel industry in reiterating their entreaty for more domestic drilling and resource extraction on federal lands.
The only common threads between the two parties seemed to be a promise to empathize with voters and attacks on their opponents for promoting bound-to-fail solutions to the nation's energy woes.
"Fed up with prices at the pump? (so are we)," House Republicans avowed in a video widely circulated by their Energy Action Team that accuses the Obama administration of forcing industry to shed jobs by stalling on offshore drilling.
A mirror image of that sentiment came from Rep. Elijah Cummings (D-Md.) yesterday. "We want the American people to know we feel their pain," he said after blasting the GOP for cutting funding for oil futures market regulation. His fellow Democrats used an appearance yesterday to renew their energy pitch (Greenwire, May 26).
In fact, both parties have ammunition to state that their foes' plans would do little to bring down the gas prices that have flirted with $4 per gallon for weeks. Senate Democratic plans to repeal oil tax benefits would have gone to pay down the deficit, not attempt to reduce oil consumption, and the nonpartisan Energy Information Administration (EIA) has estimated that expanded coastal drilling would result in gas prices just 3 cents lower per gallon in 2030.
"Many on both the right and the left in Washington continue to fixate on expanding domestic supply or investigating speculation or price gouging as the explanation for high gas and oil prices," Joshua Freed and Robert Walther of the centrist Democratic think tank Third Way wrote in a paper this week that likened such proposals to "eating cotton candy."
"[T]hese solutions may momentarily satisfy, but they do not solve the underlying problem," the Third Way clean energy analysts added. "In reality, there is little that U.S. policymakers can do to impact global oil prices."
Yet few if any of their pitches to substantively reduce the country's longstanding oil dependence are likely to cut through the thicket of partisanship that clouds Capitol Hill this year. Some are anathema to tea party-influenced conservatives who lament big government -- such as incentives for the conversion of heavy-duty vehicles to natural gas -- while others, such as the president's call to build new biorefineries for advanced ethanol, would need major engagement by the White House to corral members of both parties.
"One of the things you hear from some Republicans is that everything has to be on the table," Rep. Bruce Braley (D-Iowa) said in an interview yesterday.
"If they want to have a meaningful conversation about the tradeoffs of all these various choices" on energy, he added, "then there's no better time to have that conversation than the beginning of the summer driving season."
Meanwhile, Sen. Rand Paul (R-Ky.) has pitched a proposal he says gets right to the heart of the issue: a four-month gas tax holiday. Removing the 18 cents out of every dollar the government collects, he said, would "help the people who are struggling" with high gas prices. To offset the $10 billion to $12 billion of lost revenue for the highway trust fund, Paul would transfer the difference from the country's foreign aid spending.
But even his self-described "common sense" solution to reduce stress during the driving season is not a long-term plan, which left Paul trotting out the same arguments about domestic production and drilling in Alaska.
Interest groups join the fray
Hoping to capture drivers' attention and bring more support for higher fuel economy standards, a coalition of environmental groups released a graph earlier this week showing that gas prices were at record highs this Memorial Day, even topping 2008's $3.77-per-gallon mark. The graph was joined by an ad campaign for a 60-miles-per-gallon standard under consideration by the Obama administration for new cars and trucks produced by the year 2025.
"Strong standards will save us billions at the gas pump, clean up our air, and put Americans back to work building a new generation of vehicles that create prosperity, not oil dependence," the ad states. "So let's restore our great automotive tradition of innovation and excellence. American technology and know-how can make any new car, truck, or SUV cleaner and more fuel-efficient."
According to the Natural Resources Defense Council, one of the groups in the Go60mpg campaign, the higher fuel economy standards would save around $67 billion and reduce gasoline consumption by 17 billion gallons this summer alone.
Meanwhile, the liberal Center for American Progress released a pair of reports on energy prices, including one that accuses oil companies of bidding up oil prices ahead of the driving season. The piece from Daniel Weiss also posits that Republican policies have helped oil companies achieve the "fiscal equivalent of a giant rainstorm on your Memorial Day BBQ."
Even the American Public Transportation Association jumped in the Memorial Day frenzy, releasing a survey showing that 54 percent of vacationers planned to use public transportation at their destination instead of driving. In addition, 65 percent said the availability of transit played a role in their destination choice.
"Everyone's trying to find ways to cut back on travel costs," said Mantill Williams, a spokesman for APTA. "Public transit might be one of those easy ways. People in major cities are really taking advantage of local transit."
Prices ticking down
Still, a spokesman for House Majority Whip Kevin McCarthy (R-Calif.) said the video the GOP conference issued attacking the Obama administration was its only major lobbying piece centered around gas prices. Democrats, after rolling out an energy plan to "nudge" the administration, do not have a major lobbying push set for the holiday weekend, either.
It is possible that following months of high gas prices -- prices started approaching $100 a barrel as early as March and they had been a talking point long before -- the traditional Memorial Day rhetoric is not cutting through as cleanly as it has in recent years. In 2008, when prices first climbed close to $4 a gallon, Congress was abuzz with possible fixes, including a Republican package that would have opened more offshore drilling and rescinded a ban on oil sands, oil shale and coal-to-liquids production.
Sen. Jeff Bingaman (D-N.M.) and then-Sen. John Warner (R-Va.) even managed to pass a nonbinding resolution calling on the federal government to use less fuel to show that it could make sacrifices along with ordinary Americans.
And this year, rarely mentioned by lawmakers who lamented high gas costs this week, oil and gas prices have edged down from their early-May peak. American Petroleum Institute chief economist John Felmy told reporters yesterday that gasoline demand shrank 2.2 percent in April on a year-to-year basis after notching increases in the first three months of 2011.
"What you have is a relatively weak situation, consistent with the relatively weak economy we have in many sectors," Felmy said. He described the recent rise in gas prices as "a function of the cost of making gasoline" and defended refineries for turning out a record high amount of finished product.
Global demand for oil -- at 89.2 million barrels per day -- rather than domestic demand is a major factor in the current spike in U.S. gas prices, Felmy added. He also dismissed Democratic contentions that oil futures speculation was behind the uptick: "While you may have a lot of activity, I tend to think it makes the market more efficient."