As Democrats and Republicans continue to level charges and counter-charges at each other over the rising price Americans are paying to fill up at the gas pump, President Obama addressed the issue head on Monday.
But while Obama says “we are prepared to tap” the nation’s Strategic Petroleum Reserve (SPR) to increase fuel supplies and bring down prices, the president declined to pull the trigger, or be terribly specific on when he might do so.
Meanwhile, a House Democrat announced three pieces of legislation, including a measure that would force a release fuel from the SPR.
The price to fill up at the gas pump has risen steadily in recent weeks, an increase blamed at least partly on the unrest in the Middle East.
Congressional Republicans, including House Speaker John Boehner, have pounced on the issue to hammer Obama, arguing his administration must open up more land for drilling, including the protected Arctic National Wildlife Refuge (ANWR) in Alaska.
Obama and congressional Democrats have pushed back, noting that U.S. oil production, including that on federal lands and waters, has been increasing since 2008, with its largest single-year increase in decades in 2009. Moreover, they say, oil and gas companies are currently sitting on approximately 60 million acres of oil and gas leases that are going unused. At the same time the producers are holding back on domestic production, these same oil companies are reaping record profits from high fuel prices.
Obama answered critics Monday during a White House press conference, in his most expansive comments to date on the matter of fuel prices. The White House also released a fact sheet on what the administration is doing in terms of fuel supply.
“Even if we started drilling new wells tomorrow, that oil isn’t coming online overnight,” the president says. “And even if we tap every single reserve available to us, we can’t escape the fact that we only control 2 percent of the world’s oil, but we consume over a quarter of the world’s oil. T. Boone Pickens, who made his fortune in the oil business — and I don’t think anybody would consider him unfriendly to drilling — was right when he said that ‘this is one emergency we can’t drill our way out of.’
“We can’t place our long-term bets on a finite resource that we only control 2 percent of -– especially a resource that’s vulnerable to hurricanes, war, and political turmoil,” he adds.
Obama also argues that the payroll tax break he pushed through late last year “should also help act as a cushion for working families” during the current price spike.
Democratic Rep. Peter Welch, who has been leading a push to have Obama open up supplies from the SPR, was at his own press briefing at home in Vermont, in which outlined several pieces of legislation designed to get a handle on fuel prices.
“As rising gas prices hit Vermonters at the pump and threaten a fragile economic recovery, we must use every tool we can to ease the burden,” says Welch. “These common sense bills will provide much-needed relief in the short term and reduce the ability of speculators to drive up prices in the long term. With so many families and businesses struggling to get by in a down economy, it’s imperative that Congress and the President take action.”
In unveiling his bills, Welch notes that gasoline prices in Vermont are up nearly a dollar since September, hitting $3.74 in parts of the state. Prices are higher elsewhere in the nation.
Welch announced the following legislation Monday:
The STOP Act: The Stop Tax-breaks for Oil Profiteering ACT would close a tax loophole that encourages speculation and distorts the normal supply-demand balance of the market. Under current law, financial speculators – such as hedge funds – pay an overall tax of 23 percent on profits and losses in commodities markets, while actual commercial participants – such as farmers, fuel dealers or businesses – pay a rate of 35 percent.
The Enhanced SPR Act: The Enhanced Strategic Petroleum Reserve Act would direct the Department of Energy to release at least 30 million barrels of oil from the nation’s oil reserves, or about 5 percent of the current total volume. Such action has had a history of driving down prices in the past. Later on, the proceeds from the sale would be used to gradually acquire refined petroleum product, such as gasoline or diesel fuel over the next five years. Possessing refined products would ensure the effectiveness of the reserves, even in the event of a refinery outage.
The Federal Price Gouging Prevention Act: The Federal Price Gouging Prevention Act would give the Federal Trade Commission the authority to investigate and punish companies that artificially inflate the price of energy. The bill sets criminal penalties for price gouging, and permits states to bring lawsuits against wholesalers or retailers who engage in gouging.
Scott Nance is the publisher of the news site The Washington Current, formerly known as On The Hill. He has covered Congress and the federal government for more than a decade.