Rep. John Sullivan in The Washington Examiner: Gas prices and the need for more American-made energy for U.S.

May 9, 2011

President Obama is playing the artful dodger from the finger of blame for high gas prices. While he and his appointees skillfully dodge and point fingers at everyone else, his administration's policies and decisions have helped set the stage for the increased costs American consumers are paying at the pump now and in the future.

Here's why. Gas prices are not a sole result of supply and demand. As we have seen from political unrest in the Middle East, prices are also influenced by perceived shortages and disruption of supply. The best way to moderate gasoline prices is a consistent source of oil and gas -- and not from foreign countries but from our own backyard.
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The offshore energy potential of the United States is about 44.4 billion barrels of oil and 183.2 trillion cubic feet of natural gas, according to government estimates. That's enough oil to power 60 million vehicles for almost 25 years and enough natural gas to heat 60 million American homes for 57 years. It is also more than enough to reduce our imports by more than one-third.
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However, this administration's energy security policy is to increase the cost of energy for American consumers and to shut the door on new exploration. Officials reversed a 2010 decision to expand offshore energy explorations, and have instead proposed no new exploration in new areas of the Outer Continental Shelf until at least 2017.
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Their official and unofficial moratorium on new permits in the Gulf of Mexico, by their own estimates, will reduce production by 13 percent this year and will result in approximately 300,000 fewer barrels of oil per day produced at home by 2017.
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The nearly year-long drought of deepwater permits was rationalized by the administration, they said, because no containment system was available should another blow- out like Deepwater Horizon occur. OK, but that doesn't explain the often-conflicting requirements that practically halted development in shallow water as well.
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The containment issue appears solved with two government-approved systems now readily available. But exploration activity is still not being permitted at a rate that keeps up with offshore development in other countries. The result: less U.S. production, and eventually higher prices.
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Clearly, less production is not an issue to the White House. For them, the issue is that oil companies make too much money. Why are their revenues up? Because oil prices are up! I'll say it again; a reliable and plentiful source of oil has proven to bring down prices.
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Obama's proposal to help lower prices? Remove long-recognized business and operational deductions (similar to deductions for all business and individuals). This will not lower fuel prices, but will actually result in higher costs for consumers.
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This kind of logic makes you wonder if the president will tax grocery store owners more because food prices are up. Increased taxes increase the cost of doing business, and when the cost of doing business increases in any industry, those costs are passed on to the consumer.
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Offshore exploration and production generates jobs, and provides a reliable source of energy. And the added bonus? More revenue goes to the federal government. The oil and gas industry pays its fair share when allowed to produce.
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In 2008, the offshore oil and gas industry paid $17.9 billion in royalties, and today it is spending almost $100 million per day to the federal government in taxes.
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Mr. President, let's stop the dodging and start producing. This month, House Republicans will bring up several pieces of legislation to undo that damage caused by the Obama administration's anti-American energy agenda, including reversing the ban on new offshore drilling and repealing the defacto drilling moratorium in the Gulf of Mexico, government policies that are driving up gas prices and hurting job growth. The time to drill is now!
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Rep. John Sullivan is a Republican who represents Oklahoma's 1st Congressional District and serves on the House Energy and Commerce Committee leadership team as the vice chairman of the Energy and Power Subcommittee.
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Read the article online here.

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