The benchmark oil prices closed at just under $122 per barrel yesterday due to unrest in Nigeria and slumps in Russia's production. 'Experts' predict that prices for crude oil could go as high as $150 this year. And, that would translate to about $4.50 per gallon prices at our pumps.
What to do, what to do?
A bright young Congressman has some ideas. He is Representative Paul Ryan who was born and raised in Janesville and who has seen the impact of gas prices on the GM plant there that builds Tahoes among other vehicles. You have probably heard that GM is laying off 750 employees due to poor sales. The 'ripple effect' has already begun taking other suppliers' jobs out of the market with an announcement by one that it would lay off 132 employees. Those layoffs will continue.
Ryan issued a press release on Monday with some simple and straight-forward language (which is not always the case for government press releases). He recognizes that Congress has had a big hand in creating the mess we find ourselves contending with today. And, he has five examples of what can be done to alleviate these problems:
One: Drill for oil. There are reportedly some 10.4 billion barrels of crude to be found beneath the Arctic National Wildlife Refuge (ANWAR). Instead of begging the other oil producing nations to increase their production, we could solve our own problems and handle this nasty 'supply and demand' thing. We could keep all the oil we produce from our land mass.
Two: Build more refineries. Congress can streamline the process for building new refineries. More than thirty years has passed since a new refinery was built in the U.S. Instead, we have gone offshore for refining capacity. That not only increases our costs but it actually could be a very poor strategic move in case one of the other large countries in the world decided to take us out economically rather than militarily. Can you spell C-H-I-N-A?
Three: Streamline fuel blends. Congress could end the mandates for so-called 'boutique fuels' such as that we burn in SE Wisconsin. Those boutique fuels actually cost more and perform more poorly. Then, when ethanol is added to that mix, the power production is further reduced and the cost to consumers is increased.
Four: Don't rely on food for fuel. Congress just passed an energy bill that quintupled the ethanol mandate. The average grocery bill for Americans is reported to have risen by $70 per week in the last year as the result of the ethanol mandate. Recall that I said a few days ago that Congress had played with the marketplace and had broken it? This is an example of the dastardly 'unintended consequences' that we all know too well.
Five: Stop stoking inflation. The added impact of Federal Reserve actions to drastically reduce the interest rates has softened the dollar to the point that we pay far more for crude oil than other countries. It takes more dollars than euros to buy a barrel of crude. It takes more dollars than yen to buy a barrel of crude oil.
Rep. Ryan's final paragraph is an important one:
"The flaws and failures of Congress have done much to contribute to our current energy crisis. There are concrete steps that Congress can take that will move us toward a coherent approach to a sustainable energy policy and put immediate downward pressure on energy prices. The American people have rejected gas price pandering and finger-pointing; you deserve responsible leadership and must demand it."
There are some moves going on today in Congress that need citizens' boosts. An Ethanol reduction act is winding its way and has about twenty-four sponsors. If you and I put enough pressure on our elected officials, we can make a difference and get some of these things moving more rapidly. If you and I demand that our presidential candidates 'get real' about these issues, we can cause some movement.
On the other hand, if we expect the other person to do the heavy lifting, then we'll get what we deserve. Each of us is but a small voice. But we all know what a choir of a hundred small voices sounds like. We all know what the cheers of 50,000 small voices sounds like. You can call, write and email your representatives. And you can do it over and over again. You can encourage friends and relatives who are represented by other officials to do the same. This is called a 'grass roots' movement and many, many politicians find themselves in office today because of grass roots movements.
It may not seem to you that elected officials listen to you, but they do if they're intelligent. They especially listen when they hear the same thing in differing words from many people. The words don't need to be fancy. They do need to be heartfelt Our Congressional representative is Jim Sensenbrenner and he is one of the originators of the Ethanol reduction act that I mentioned earlier. Tell him you're behind him, too.
