Friday, April 22, 2005

gas prices, gas prices, gas prices

Here is an article on the energy bill I pulled basically at random (from the Houston Chronicle):

House energy bill targets gas prices


...By a vote of 249-183, the House approved a comprehensive new energy bill designed to increase domestic energy supplies and lessen the nation's dependence on foreign oil.

The 1,000-page, $8.1 billion bill seeks to expand domestic oil and natural gas drilling, encourage construction of new refineries and bar states from requiring their own specialized fuel blends — measures proponents say will help U.S. motorists.

To drive home the point, House Speaker Dennis Hastert, R-Ill., Thursday visited an Exxon station near Capitol Hill, where regular unleaded was selling for nearly $2.40 a gallon.

"Folks, it's about gas prices, gas prices, gas prices," Hastert said. "Consumers are getting squeezed at the pumps."


Energy Secretary Samuel Bodman, responding to voters' e-mails on the White House Web site, said "the fundamental problems that caused the high gas prices ... were largely ignored during the 1990s and will not be fixed overnight."

But Stephanie Carter, field organizer for the Texas Public Interest Research Group, said the House passed a bill "that will do nothing to help consumers and will ignore clean alternatives" all just hours before the start of Earth Day.

The centerpiece of the energy bill would allow oil companies to hunt for crude in Arctic National Wildlife Refuge. That proposal could bring a flood of new oil to U.S. refineries, but those barrels wouldn't begin flowing for several years.

But other measures would give refiners greater flexibility that can help avoid the price spikes that have plagued summer driving for years.

Red Cavaney, president of the American Petroleum Institute, predicts the legislation could make a difference by the summer of 2006.


EIA analysts examined two proposals included in this bill — a ban on the gasoline additive methyl tertiary butyl ether (MTBE) and expanded use of the corn-based component ethanol — and concluded those measures could push up the cost of producing gasoline by a few cents per gallon.


MTBE was added to gasoline to help fuel burn more cleanly. But this chemical has been blamed for fouling water supplies.

Protection from such lawsuits was "the No. 1, the No. 2 and the No. 3 issue for us," oil industry lobbyist Cavaney said.

Much of the nation's MTBE production is centered in Houston. And House Majority Leader Tom DeLay, R-Sugar Land, has repeatedly insisted it remain in the bill.

Now I dislike paying high prices for gas as much as anyone else, but this is incredibly short-sighted. Energy Secretary Bodman is right to say that "the fundamental problems that caused the high gas prices ... were largely ignored during the 1990s," but he doesn't acknowledge that this bill hardly addresses those fundamental problems. Lower gas prices in the short term will only lead to gas shortages in the next few decades.

Debates over ethanol -- a scam, basically -- and MTBE are totally besides the point. Environmentalists are already using MTBE to attack DeLay, but I'm not sure I agree with their premise. MTBE is a sad case, but since Congress told oil companies to add it, I don't see how they can hold the companies accountable now (feel free to correct me in the comments if you disagree). Anyway, the real necessity is alternative sources of energy, which this bill hardly addresses. Any tax breaks they give to renewable energy are totally offest by the breaks they are giving to oil companies and utilities.


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