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How To Slash Oil Dependence

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"How To Slash Oil Dependence"

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Today’s hearing on high gasoline prices is like the rerun of a bad movie. It’s up to you to change the finale. Congress must slash oil dependence by supporting the doubling of vehicle fuel economy standards, investing in alternative fuels, rejuvenating our public transportation infrastructure, and paying for it by ending Big Oil tax breaks. The American people would give this ending a standing ovation.

Below is testimony from Daniel J. Weiss, senior fellow at the Center for American Progress, to the House Subcommittee on Energy and Power on how to combat high gas prices.

The recent spike in oil and gasoline prices is not a first-time event. It has occurred twice previously in the past four years. Fortunately, we are better prepared to withstand its impact because we are using less oil due to the vehicle fuel economy standards adopted by President Obama in 2009.

We are also producing more of our own oil. For the first time since President Clinton, the United States is producing a majority of the oil we rely on to power our vehicles and economy. We are less reliant on other nations for oil and send less of our treasure abroad.

This progress, however, cannot mask the fundamental fact that we rely too much on a single fuel and are thus extremely vulnerable to volatile prices or international events beyond our control. To end the oil price rollercoaster that inflicts real damage to our economy and middle class, we must dramatically curtail our reliance on oil as our primary transportation fuel.

As you know, high oil and gasoline prices slow economic growth and take a real toll on families’ already-strained budgets. Unlike many other commodities, demand for gasoline does not significantly decrease even as prices increase because most people cannot quickly and significantly reduce the amount they drive by changing jobs or buying a new home.

Our last two presidents recognized that there are no quick fixes to reduce high oil or gasoline prices. In 2008 President George W. Bush said that “if there was a magic wand to wave, I’d be waving it” to lower prices.

Last month President Obama said that “there are no silver bullets short term when it comes to gas prices—and anybody who says otherwise isn’t telling the truth.” He also noted that the United States uses 20 percent of the world’s annual oil consumption but has only 2 percent of the reserves.

In lieu of wands, bullets, or slogans, this long-term problem requires long-term solutions. We need a long-term “all of the above” strategy that generates long-term investments in modern fuel economy standards, alternative fuels, and public transportation that can reduce our vulnerability to future oil and gasoline price spikes.

In 2005 President Bush supported this idea when he said, “I will tell you with $55 oil, we don’t need incentives to the oil and gas companies to explore. There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent.”

President Obama has demonstrated leadership in using less and producing more oil. In 2011, we consumed the least amount of oil since early 2001, and even more savings are imminent as we implement modern vehicle fuel economy standards. We are producing the most oil in at least eight years. In addition, the administration and many in Congress have supported investments in alternative-fuel vehicles, particularly electric passenger vehicles and natural-gas-powered trucks. Congress must act on these proposals.

Unfortunately, the pending House transportation bill would disinvest in public transportation—something that’s essential to us using less oil and protecting families from high gasoline prices. While withholding investments for alternatives to oil, we continue tax breaks for Big Oil companies even though the price of oil is nearly double compared to when President Bush said that such support was unnecessary.

This includes tax breaks for the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—which made a record $137 billion in profits in 2011 while they produced 4 percent less oil. It makes little sense to continue $4 billion in annual oil and gas tax breaks for oil and gas companies. Instead, we should invest these revenues in helping Americans reduce their oil and gasoline use and save money.

There is a proven tool to provide some temporary relief now from high prices. Selling a small amount of oil from the Strategic Petroleum Reserve in coordination with sales from International Energy Agency reserves would boost world oil supplies. Such a sale has occurred under the last four presidents and has lowered oil and gasoline prices every time. This can cut prices and burst the “bubble” caused by Wall Street speculators driving up oil prices for a quick profit.

Finally, the Commodities Future Trading Commission must finalize the position limits on large Wall Street speculators to reduce their impact on volatile, high oil prices.

Today’s hearing on high gasoline prices is like the rerun of a bad movie. It’s up to you to change the finale. Congress must slash oil dependence by supporting the doubling of vehicle fuel economy standards, investing in alternative fuels, rejuvenating our public transportation infrastructure, and paying for it by ending Big Oil tax breaks. The American people would give this ending a standing ovation.

Download the full testimony (pdf)

Daniel J. Weiss is a Senior Fellow and Director of Cimate Strategy at the Center for American Progress.

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24 Responses to How To Slash Oil Dependence

  1. Dick Smith says:

    Is there any Republican saying anything like this today? Or, is it all politics 24/7? Just asking.

    • Sasparilla says:

      Your second option appears to be reality – the House GOP would (if given the choice) dismantle much of the existing plans to reduce oil consumption.

  2. clays says:

    So if releasing oil from the strategic reserve increase supply and reduces prices… wouldn’t producing more at home also have the same effect?

  3. clays says:

    “We need a long-term “all of the above” strategy that generates long-term investments in modern fuel economy standards, alternative fuels, and public transportation that can reduce our vulnerability to future oil and gasoline price spikes.”

    That’s all well in good buy many of your long term goals have negative short term impacts.

  4. Raindog says:

    Compressed natural gas would be a quick and relatively cheap and easy way to decrease oil consumption and reduce pollution. And it costs less than half of what gasoline costs. Here are the environmental benefits:

    The U.S. Environmental Protection Agency calculated the potential benefits of CNG versus gasoline based on the inherently cleaner-burning characteristics of natural gas, summarized in Clean Alternative Fuels: Compressed Natural GasPDF.

    * Reduces carbon monoxide emissions 90%-97%
    * Reduces carbon dioxide emissions 25%
    * Reduces nitrogen oxide emissions 35%-60%
    * Potentially reduces non-methane hydrocarbon emissions 50%-75%
    * Emits fewer toxic and carcinogenic pollutants
    * Emits little or no particulate matter
    * Eliminates evaporative emissions

    We’ve got lots of it and existing cars can be retrofitted for about $1500.

    • Joe Romm says:

      It doesn’t reduce GHGS, sorry, so it isn’t worth the huge expenditure of resources.

      • Raindog says:

        “It doesn’t reduce GHGS, sorry, so it isn’t worth the huge expenditure of resources.”

        You don’t know that it would not reduce GHGs for sure. The methane leakage might equal the 25% savings in emissions over gasoline but I doubt it. And it would cost next to nothing in taxpayer dollars. In fact if government vehicles switched to natural gas, it would save the country billions that could be spent on wind and solar projects. Many buses and garbage trucks have moved to natural gas and it is really helped to improve air quality and cut costs in cities where this has occurred.

        Don’t be so quick to condemn natural gas. It could do a lot of good if done right. In fact it is already doing a lot of good for the economy and the environment.

        Electricity has to come from somewhere and right now it mainly comes from coal and gas. Switching to electric cars therefore uses mainly coal followed by gas. Which is better? CNG-powered cars or electricity from coal plants?

        • Joe Romm says:

          A false choice, as coal power is dying. So incremental electricity will be gas and renewables.

        • John Tucker says:

          Pollutants Found to Be Significantly Related to CNG Use When Compared to Reformulated Gasoline in Clean LDVs Pollutant Percent Reduced
          Volatile Organic Compounds (VOC) 10%
          Carbon Monoxide (CO) 20% to 40%
          Oxides of Nitrogen (NOx) 0%
          Particulate Matter (PM) 80%
          Methane –400% (increase)

          ( http://www.afdc.energy.gov/afdc/vehicles/emissions_natural_gas.html )

          cripes – just what we need.

          • John Tucker says:

            Those studies need to be updated as they are counting reducing flairing of NG as cutting NG emissions over gasoline.

            Also the total leakage seems too low from what we know now.

          • John Tucker says:

            the global vehicle fleet emits 0.45 ± 0.12 Tg of CH4 yr-1 (0.34 ± 0.09 Tg of C yr-1), which represents <0.2% of anthropogenic CH4 emissions. This estimate includes the effects of vehicle aging, cold start, and hot running emissions. The contribution of CH4 emissions from vehicles to radiative forcing of climate change is 0.3−0.4% of that of CO2 emissions from vehicles. ( http://pubs.acs.org/doi/abs/10.1021/es034837g ) in case you were wondering.

  5. with the doves says:

    Interesting how persistent high prices have decreased oil use in the US and other OECD countries. This is what would happen with fee and dividend or a carbon tax … but this way all the $ goes to the oil industry.

    It would be nice to see a time series plot of US liquid fuel use, broken out by type (gasoline, diesel, heating, etc.). Couldn’t find it on EIA.gov, though maybe it is there.

    • h4x354x0r says:

      The Oil Poster gives at least some grain to types of liquid fuel use. It drives home just how marginal unconventional reserves are on daily production:

      http://www.oilposter.org/posterlarge.html

      Too bad this thing is already a year out of date. We’ve actually hit a new peak of worldwide production this year, by about a million barrels.

      Someone needs to update this poster, and add the graph of inflation-adjusted dollars-per-barrel on top.

      WRTG seems to have some of the most up-to-date graphs on that: http://www.wtrg.com/prices.htm

  6. Leif says:

    Take the profit out of the pollution of the commons. All else will fall into place IMO.

    In the interim it would be helpful to give “Humanity” a seat at the table. IMO

  7. h4x354x0r says:

    I’m not sure where the author got that “…[the US] is producing a majority of the oil we rely on to power our vehicles and economy.”

    This just isn’t true.

    The US produces about 11% of worldwide oil supplies – about 9 Million barrels per day. We export about 2M bbl/day.

    The US consumes 24% of worldwide oil production – about 19 Million barrels per day. We import about 10M bbl/day.

    Transportation consumes about 70% of oil supplies. Domestic supplies still account for less than 50% of total consumption. It’s technically true we are producing a “majority” of oil we use specifically for domestic transportation, but you can’t throw in the rest of the economy and have the statement still be true.

  8. Chuck says:

    “United States uses 20 percent of the world’s annual oil consumption but has only 2 percent of the reserves.”

    This reminds me, if the big oil companies that are funding deniers only own 15% of the world oil supply … what do the owners of the other 85% think, and do they fund deniers?

    http://en.wikipedia.org/wiki/Petroleum_industry
    “The oil produced by the “supermajor” companies accounts for less than 15% of the total world supply. Over 80% of the world’s reserves of oil and natural gas are controlled by national oil companies.”

    http://www.fas.org/sgp/crs/misc/RL34137.pdf
    See “Table 2. World Liquid Petroleum Reserves Holdings.” Exxon is not even in the top 10.

  9. John Tucker says:

    “This progress, however, cannot mask the fundamental fact that we rely too much on a single fuel and are thus extremely vulnerable to volatile prices or international events beyond our control. To end the oil price rollercoaster that inflicts real damage to our economy and middle class, we must dramatically curtail our reliance on oil as our primary transportation fuel.”

    Is this a joke – do you know there is already a answer to this ?

    Economy and conservation are simply not happening.

    After all the bashing of nuclear post fukushima and the exalting of natural gas as the “transition fuel” we are in a mess.

    You couldn’t make a car powered with nuclear directly or renewables and that synergized the electric vehicle quest.

    Thats dead.

    Now because of pandering to anti nuclear groups and probably due in part to groups like American Progress accepting natural gas funds we are nearly to a full natural gas conversion. Electricity is done. Transportation is the next losing battle:

    More natural gas vehicles hitting the market ( http://www.google.com/hostednews/ap/article/ALeqM5gKyPscXcQ1f-Rqm8I9aJIsaLZv3w?docId=bf83bc4bba2943d5abc34ea122d0f868 )

    Chrysler to sell natural gas-powered truck ( http://www.heraldnet.com/article/20120307/BIZ/703079849/1005 )

  10. Christopher Johnson says:

    The Open Fuel Standard act has been reintroduced in the 2012 congress. http://www.openfuelstandard.org/