Last week, the US House of Representatives passed (385-25) H.R. 6022, which was intended to suspend the acquisition of petroleum for the Strategic Petroleum Reserve. The idea, I'm guessing, was to reduce the impact of the Pelosi Premium by increasing the supply by a fraction of what is neccessary to actually affect the market price of oil. Simply put, H.R. 6022 was nothing more than political theatre so members of Congress could come home and say, "We did something." The truth is: they've done nothing.I'm not alone in thinking that this was an empty gesture on the part of a desperate Congress that fails to understand that in order to bring down the price of oil for Americans, we need to increase our supply. The proof? Here is a press release from the Institute for Energy Research:
Who got it right? 25 Republicans got it right...Institute for Energy Research (IER) calls on Congress to take the only untested approach remaining – increasing American supplies
WASHINGTON, D.C. – The price of oil reached a record high of $129.31 in trading today, less than one day after President Bush signed legislation passed by Congress to halt shipments to the Strategic Petroleum Reserve (SPR).
“Many in Congress predicted that the SPR measure would send a message to the marketplace and lower consumer prices, but seventy thousand barrels is a mere whisper, and the message the market received was that Congress will not take any meaningful action to increase U.S. supplies,” said Thomas Pyle, president of IER. “The market appears to have responded accordingly.”
Today’s price record confirms what a chorus of economists and industry organizations concluded previously, which is that suspending SPR shipments will have virtually no effect on price. On average, the United States fills the SPR with roughly 70,000 barrels of crude oil per day, which is less than one-tenth of one percent of global daily consumption and a fraction of what the United States could produce if Congress ordered an increase in domestic production.
“During periods of high prices, the Congress has tried everything from corporate investigations to tapping national security reserves, but it has never actually ordered a significant increase in American production,” Pyle continued. “American consumers are not going to see any meaningful relief until Congress gets serious about the front end of the law of supply and demand. It’s just that simple, but supply and demand is a law that has escaped Congress for decades.”
If Congress were serious about sending a messaging to energy markets, it could lift the production bans on the Outer Continental Shelf and ANWR’s coastal plain, repeal the Congressional prohibition precluding oil shale leasing, and repeal Section 526 of the Energy Independence and Security Act of 2007, which prohibits federal contracting for “nonconventional” sources of transportation fuels such as heavy oils, coal-to-liquids, oil sands, and oil shale. For more information on what the federal government can do to lower energy prices, visit www.energyrealism.org.
AkinThe entire Ohio delegation, including Republican Leader, my Congressman and a Great American -- John Boehner -- got this one wrong.
Barton (TX)
Campbell (CA)
Cole (OK)
Conaway
Cubin
Doolittle
Ehlers
Foxx
Franks (AZ)
Hensarling
Herger
Inglis (SC)
King (IA)
Lamborn
Linder
Lucas
Mica
Neugebauer
Pickering
Radanovich
Scalise
Weldon (FL)
Westmoreland
Wilson (SC)
What would have been meaningful legislation? So glad you asked. Someone should have put forth a bill that would open up ANWR, would have allowed off-shore drilling off both coasts, and would have called for the building of new refineries. Smart legislation would also have called for the reduction in regulations governing the number of boutique blends of gasoline that are being produced in order to comply with all of the various state wishes.
If they had done that, Congress would have had an impact on the price of gasoline in this country. But they didn't. And they wonder why they have such crummy approval ratings.
UPDATE 1: Oh sure, this will fix it...let's sue OPEC! al-Reuters reports:
The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.This is NOT the answer... If you could see me right now, you'd see me shaking my head in disgust.
The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.
The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.
The legislation also creates a Justice Department task force to aggressively investigate gasoline price gouging and energy market manipulation.
The only good news is that 59 more Congresscritters have realized that political theatre isn't a solution.
UPDATE 2: Democrats raise the white flag on gas prices:
WASHINGTON, DC – House Republican Leader John Boehner (R-OH) today opposed the Democratic Majority’s “NOPEC” legislation, which passed last year on May 22, 2007 as well. Boehner issued the following statement:So we have that going for us...
“By passing legislation already approved by the House a year ago, Democrats have waved the white flag on gas prices. They have no ‘commonsense plan’ to lower fuel costs – just the same, tired proposals that will do nothing to increase our energy supply on behalf of families and small businesses.
“With gas prices soaring to an all-time high of $3.80 today and the summer driving season just ahead of us, the American people expect more out of Congress than the legislation passed – again – by the House today. Instead, they expect their leaders to move forward on reforms that will boost American supplies of energy and bring down the skyrocketing costs of gasoline. Tomorrow, House Republicans will unveil those reforms to reduce our dependence on foreign sources of energy, protect us against blackmail by foreign dictators, create American jobs, and grow our economy.
“The Democrats’ inaction on gas prices is the surest sign yet that Washington is broken. Republicans are prepared to deliver the change America deserves with a meaningful and comprehensive energy agenda.”
...which is nice.
Actually, I am glad to see that we aren't sitting back and just whining about these issues and are, instead, putting forth real alternatives. I look forward to seeing what comes of this...
