Gas Prices Rise – Congress Provides Only Bandaid Solutions

DALLAS (November 7, 2007) – Crude oil futures surged today to a record high of $98.62 per barrel, propelled by a sharp drop in crude oil supplies-a problem that could have been averted had Congress started taking steps 10 years ago, says H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA).  Crude oil futures surged on word that that inventories declined by 800,000 barrels.

"Instead of taking proactive steps to increase supplies, Congress has fiddled around while consumers burned what we had," said Burnett, noting that analysts have predicted sustained higher prices for years.

Burnett noted that there are only two ways to reduce high oil and gas prices: a reduction in demand or an increase in supply.  Since world demand is increasing, we cannot appreciably affect demand in the short or mid-term without the technology to separate economic growth from fossil fuel energy growth – something we just don't have yet.

Therefore, national policy should focus on increasing supply.  Yet time and again Congress has missed opportunities to utilize the billions of barrels of oil locked off-shore and in Alaska.  For example:

  • If Congress had opened the Artic National Wildlife Refuge (ANWR) to oil exploration back in 1990, when the issue was first debated, we would have that oil today.
  • If Congress had opened ANWR and allowed off-shore drilling as part of the energy legislation debated at the start of the Bush presidency, at least some new production would be coming online now.
  • If Congress had acted in 2005, when the supply issues were again debated, we would be at least a few years down the road toward lessening energy dependence.

Tapping new oil in the U.S. would reduce prices because it would increase supply to world markets, and the location of new oil would reduce uncertainty and price instability.

"Congress seems intent on passing bills that will make gasoline supplies even tighter, all the while shedding crocodile tears for the plight of the poorest consumers," said Burnett.