U.S. Senator Orrin Hatch (R-Utah) joined with Senator John Cornyn (R-Texas) and 30 additional Senate colleagues in writing to President Obama urging that he take steps to address the rising cost of gasoline. In the letter, the Senators outline several specific ways the Obama Administration can act to reduce gas prices at the pump, such as expanding access to federal lands, increases areas for offshore drilling, and eliminating permit delays for leases.
The Senators wrote that the Administration’s “proposed offshore oil and natural gas leasing plan for 2012 to 2017 eliminates 50 percent of lease sales provided for in the previous plan, opens less than three percent of offshore areas to energy production, and imposes a moratorium on developing energy from 14 billion barrels of oil and 55 trillion cubic feet of natural gas in the Atlantic and Pacific oceans.” They continued, saying that “The moratorium on exploration in the Gulf of Mexico, and persistent delays for permits in shallow and deep water leases, could result in a 19 percent decrease in production in 2012 compared to 2010, according to an Energy Information Administration projection.”
The Senators also discussed the effect that regulations imposed by the Obama Administration are having on the cost of gasoline. They wrote that “even as gasoline prices near $4.00 a gallon, next month, the Environmental Protection Agency (EPA) plans to propose its вЂTier 3’ rule to cut air emissions from fuels and light-duty vehicles, including requiring refiners to drastically cut sulfur in gasoline. A recent study concluded the rule could increase the cost of manufacturing gasoline by 12 to 25 cents per gallon. It could raise the refining industry’s operating costs by $5 billion to $13 billion annually, lead to a 7 to 14 percent reduction in gasoline supplies from U.S. refiners, and force as many as seven U.S. refineries to shut down.”
In addition to Hatch and Cornyn, the letter was signed by Sens. Sessions (R-AL) Vitter (R-LA), Toomey (R-PA), Risch (R-ID), Coburn (R-OK), Johnson (R-WI), Lee (R-UT), DeMint (R-SC), Rubio (R-FL), Lugar (R-IN), Grassley (R-IA), Crapo (R-ID) Coats (R-IN), Wicker (R-MS), Chambliss (R-GA) Burr (R-NC), Inhofe (R-OK), Isakson (R-GA), Barrasso (R-WY), Heller (R-NV), Hutchison (R-TX), Roberts (R-KS), Thune (R-SD), Johanns (R-NE), Hoeven (R-ND), Boozman (R-AR), Blunt (R-MO), Shelby (R-AL), Kyl (R-AZ), and Enzi (R-WY).
The text of the letter is below:
February 29, 2012
President Barack Obama
The White House
1600 Pennsylvania Avenue
Washington, D.C.
Dear Mr. President:
We write to express our concern about the rising cost of gasoline and your Administration’s failure to take concrete actions to address this serious problem. The average U.S. price of a gallon of regular gasoline has more than doubled since the week of your inauguration in January 2009, from $1.84 to $3.72. Furthermore, according to the Associated Press, the typical U.S. household spent $4,155 filling up at the pump in 2011, an all-time high, and 8.4 percent of the median household income—the highest percentage spent for gasoline since 1981, when oil prices had soared due to crisis in the Middle East.
Last week you stated, “With or without this Congress, I’ll continue to do whatever I can to develop every source of American energy, so that our future isn’t controlled by events on the other side of the world.” Indeed, the fact remains there are concrete actions within your power that can help ease fears of oil supply disruptions and skyrocketing gasoline prices.В As you acknowledged in your March 2011 energy security speech, “producing more oil in America can help lower oil prices, create jobs, and enhance our energy security.” However, several policies of your Administration are in direct conflict with this stated goal, and are contributing to the economic burden felt by families and businesses facing rising prices.
Expanding access to federal onshore and offshore lands, and eliminating permit delays for leases, could help lower prices and strengthen our energy security while creating jobs and boosting tax revenues. Unfortunately, your Administration’s proposed offshore oil and natural gas leasing plan for 2012 to 2017 eliminates 50 percent of lease sales provided for in the previous plan, opens less than three percent of offshore areas to energy production, and imposes a moratorium on developing energy from 14 billion barrels of oil and 55 trillion cubic feet of natural gas in the Atlantic and Pacific oceans. The moratorium on exploration in the Gulf of Mexico, and persistent delays for permits in shallow and deep water leases, could result in a 19 percent decrease in production in 2012 compared to 2010, according to an Energy Information Administration projection.
Alleviating burdensome regulations would also help lower energy costs. For example, even as gasoline prices near $4.00 a gallon, next month, the Environmental Protection Agency (EPA) plans to propose its “Tier 3” rule to cut air emissions from fuels and light-duty vehicles, including requiring refiners to drastically cut sulfur in gasoline. A recent study concluded the rule could increase the cost of manufacturing gasoline by 12 to 25 cents per gallon. It could raise the refining industry’s operating costs by $5 billion to $13 billion annually, lead to a 7 to 14 percent reduction in gasoline supplies from U.S. refiners, and force as many as seven U.S. refineries to shut down. Combined with proposed greenhouse gas emissions rules (which will serve as an energy tax on every consumer), new source performance standards, and the boiler “maximum achievable control technology” rule, these could put more U.S. refiners out of business, leading to even higher gasoline prices at the pump. The combined regulatory onslaught should be weighed against the impact on families and employers across the country.
Finally, reconsidering your denial of the Keystone XL pipeline would also secure future additional supplies of oil, bringing more than 700,000 barrels per day in additional Canadian crude oil.В Rather than asking Saudi Arabia and other OPEC countries to produce more oil, we should work closely with our Canadian neighbors to reduce our dependency on oil from OPEC. В Canada is a reliable and geographically secure trading partner whose oil exports are insulated from potential supply disruptions threatened by geopolitical turmoil found in the Middle East and the impulses of OPEC, including Iran, Libya, and Venezuela.
All of these actions are within your Administration’s purview, and would signal to markets that America is serious about reducing its vulnerability to geopolitical oil shocks around the world. The actions you take will help determine how long our pain at the pump continues.