Tuesday, May 24, 2011

GOP & DEMS Trade Reports & Barbs On Gas Prices At Hearing

May 24: The House Committee on Oversight &  Government Reform, Chaired by Darrell Issa (R-CA) with Ranking Member Elijah Cummings (D-MD), held a hearing entitled, "Pain at the Pump: Policies that Suppress Domestic Production of Oil and Gas." The hearing featured testimony from U.S. EPA Administrator Lisa Jackson and David Hayes, Deputy Secretary U.S. Department of Interior (DOI). Additionally, Chairman Issa released a 43-page report entitled, Rising Energy Costs: An Intentional Result of Government Action; and, Ranking Member Cummings released a Democratic staff report entitled, Real Help for American Consumers: Who's Profiting at the Pump?
    Administrator Jackson testified, "As a matter of geology, America will never control more than a tiny fraction of the world's oil supply.3 America cannot prevent gasoline and diesel prices from rising when global supplies are constrained and world demand for oil is steady or increasing. Still, there are benefits to being less reliant on oil imports. Last year, American oil production
reached its highest level since 2003, and this Administration supports increasing safe and responsible oil production here at home. . ."
    Jackson said, "We can mitigate the impact of high fuel prices on American families and businesses by enabling them to travel the same distances and conduct the same commerce on less gasoline and diesel. The fuel efficiency standards that EPA and the Department of Transportation established last year for new cars and light trucks will save the average American driver three thousand dollars over the life of the car and conserve 1.85 billion barrels of oil over the life of vehicles of Model Years 2012 through 2016. The Administration will soon issue similar standards for heavy-duty vehicles of Model Years 2014 through 2018 and is designing ones for cars and light trucks of Model Years 2017 through 2025."
    DOI's Hayes testified that, "President Obama has said that 'we cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.' At the Department, we are working to expand cleaner sources of energy, including renewables like wind, solar, and geothermal, as well as clean coal and natural gas on public lands. . . Last year, America produced more oil than at any time since 2003."
    Hayes continued providing testimony on: Measures to Facilitate Development; Incentives for the Prompt Development of Oil and Gas Leases; Tools for the Federal Government to Oversee Offshore Oil and Gas Development Activities on a Timely and Effective Basis; Ensuring a Fair Return for American Taxpayers and Accountability for Safety Violations and Oil Spills; Necessary Reforms for Offshore Development; Onshore Development: Restoring Balance to the Process; and Improving Our Regulatory Programs.
    Chairman Issa indicated that the Republican report highlights evidence that the statements by President Obama and Energy Secretary Chu about "intentionally raising energy costs for Americans" can be seen across the federal government: from blocking production in the Gulf of Mexico, to hindering "fracking" technology, and stifling oil and gas production on public lands. He said, "The most troubling things about outlandish statements made by key Obama Administration officials about the need to raise energy costs is that when we examined the evidence, they appear to reflect the agenda they are pursuing. These are obviously not the policies Americans want or support." He outlined the key of the report as follows:
  • Key Obama Administration figures have expressed a belief that Americans should pay more for energy – a pattern of actions shows the Administration is, in fact, pursuing an agenda to raise the price Americans pay for energy.
  • While the Administration touts nascent "green" energy technologies, U.S. domestic energy resources are currently the largest on earth -- greater than Saudi Arabia, China and Canada combined.
  • Recent Administration action has already led to significant cost and regulatory barriers that have limited domestic production of oil.
  • EPA has collaborated with environmental groups to target independent energy producers for environmental concerns not related to their operations.
  • Some green energy sources the Administration is promoting at the expense of expanded domestic oil, gas, and coal supplies create unintended environmental, security and economic consequences.
    Ranking Member Cummings called on Chairman Issa to work with him to investigate the growing impact of excessive oil speculation on high gas prices. He released the Democratic staff report which finds that, "Addressing excessive speculation offers the single most significant opportunity to reduce the price of gas for American consumers." He said the report's "chief conclusion" is that, in order to make the most significant impact on lowering gas prices, the Committee's primary focus should be on countering the growing impact of excessive speculation, rather than pursuing the oil industry's priorities of increasing domestic drilling or repealing safety measures put in place after the devastating BP oil spill." Major findings of the 31-page Democratic report include:
  • Excessive oil speculation could be inflating gas prices by as much as 30%.
  • Efforts to expand domestic drilling or eliminate safety measures put in place after the devastating BP oil spill would have a negligible impact on gas prices, potentially saving only pennies per gallon even after several decades
  • Despite claims of a "permitorium," or a de facto moratorium on drilling in the Gulf, the reality is that the Administration has approved 14 deepwater drilling permits, 55 shallow water permits, and two new exploration plans since the BP oil spill. Initial delays in obtaining permits were a result of efforts to develop technology to prevent and contain the same type of blowout that caused the BP oil spill.
  • Despite the worst economic crisis since the Great Depression, oil companies have continued to make the highest profits of any industry in the world. 
  • OMB estimates that eliminating unnecessary tax subsidies could save more than $43 billion over the next ten years
    Access the GOP hearing website for links to testimony and related information (click here). Access the DEMS hearing website for links to testimony and related information  (click here). Access an overview and link to the complete GOP report (click here). Access an overview and link to the complete DEMS report (click here). [*Energy/Gasoline]