We Can Do Something About Gas Prices

March 19, 2012

Gas prices continue to dominate the headlines, with the national average price for regular fuel near $4.00 a gallon and prices even higher in some parts of the country. House Republicans are calling for policies to increase North American energy production, reduce regulatory burdens, and reduce our dependence on Middle East oil. Meanwhile, the president has begun trying to claim credit for an "all-of-the-above" energy strategy even as he has mocked Republicans' calls for more domestic drilling. While we acknowledge there is "no silver bullet" to cure our energy woes, House Republicans know there are measurable steps we can take that could help bring down prices and secure our energy future.

Factors affecting price
There are many factors thataffect the total cost Americans pay at the pump. According to the U.S. Energy Information Administration, almost 76 percent of the price of a gallon of gasoline is derived directly from is the price of crude oil, about 12 percent of the price is from federal and state taxes, and the remaining balance pays for refining and distribution.


Source: http://www.eia.gov/petroleum/gasdiesel/

Republican Solutions: Increase Supplies
The price of crude oil is by far the largest contributing factor to gasoline prices. Increased global competition for oil supplies and political tensions in oil-producing countries are contributing to high oil prices as uncertainty swells over access to future supplies. Republicans are focused on two options to help further insulate ourselves from overseas supply disruptions: expand energy production here at home and increase imports from our North American allies.
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The U.S. is home to some of the largest energy resources in the world— including not just resources for transportation fuels, but also those that can power homes and businesses, we have more fossil energy reserves than Saudi Arabia and China combined—yet obstructive government polices have kept these valuable supplies locked away. President Obama's policies have placed important offshore areas and federal lands off-limits to energy production. Newly released data from the U.S. Energy Information Administration confirms a production reduction under President Obama's leadership. The EIA reports that oil production on federal lands and waters declined 14 percent between 2010 and 2011. Opening more federal areas to development and streamlining permits would allow much-needed oil to come online, helping to reduce pressure on the price of crude....

Critics in the administration like to claim authorizing new drilling won't make a difference in today's gas prices, but market history shows that perceptions of future supplies can have a direct impact on today's costs. When President Bush lifted the executive-branch moratorium on offshore drilling in 2008, the price of oil dropped over $9 almost immediately.

The Keystone XL pipeline is another way America can increase its access to secure oil supplies. The pipeline would expand U.S. access to the third largest oil reserves in the world. Once constructed, the pipeline will bring nearly a million barrels of oil per day to U.S. markets. Approval of the pipeline will send a signal to the market that the U.S. will have access to additional secure oil supplies, helping to ease the pressure on prices in the short term and securing access to a stable energy source over the long term.

Republican Solutions: Reduce Regulatory Burdens
President Obama's administration continues to pursue a series of costly regulations on American energy producers and distributors that will make gasoline even more expensive. These regulations are contributing to refinery shutdowns and increased costs, which ultimately get passed down to consumers at the pump.

The administration's aggressive regulatory agenda has amounted to an effective national energy tax on American businesses and consumers. EPA estimated cap-and-trade would increase gasoline prices by 16 cents per gallon in 2015 and 30 cents per gallon by 2030. Even after Congress rejected unpopular cap-and-trade legislation, the Obama administration is moving forward with greenhouse gas regulations.
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EPA's regulations also serve as a deterrent to American energy production. An unfriendly regulatory environment and increased costs are forcing producers and refiners to rethink investments and many are moving jobs and operations overseas.

Republican Solutions: The American Energy Initiative
House Republicans have a plan to expand America's access to stable energy supplies and reduce the regulatory burdens that are threatening affordable energy. Under the American Energy Initiative, the House has passed a number of legislative solutions to help ease the pain of rising gasoline prices and reduce our reliance on Middle East oil, but to date, Senate Democrats have refused to approve any of these bills.

This ongoing effort embraces a true all-of-the-above approach and is focused on solutions to increase all forms of American energy and stop harmful government policies that are driving up prices.

Learn more about the American Energy Initiative here.