There’s no silver bullet to bring down prices at the pump, President Obama said in a radio address just last month.
Nevertheless, as worries about high prices sweep the nation, myriad solutions have cropped up from energy analysts, industry professionals, and lawmakers in both chambers of Congress.
So what would these proposals actually do for gas prices? National Journal takes a look at how increased offshore drilling, stricter fuel economy standards, eliminating tax breaks, and clean energy investments would ease pain at the pump, if at all.
More Offshore Drilling
At least one, and possibly two, bills aimed at speeding up and increasing offshore drilling are set to face a House vote on Thursday, according to a spokeswoman for House Majority Leader Eric Cantor, R-Va.
The premise is that increased production from the drilling will bring down the high prices and ease consumers’ pain at the pump. Lawmakers got an “earful” about prices over recess, according to Cantor.
With the determination to lower prices, the bills are set to pass the House and stall in the Senate. But even if the bills got traction in the upper chamber, they probably wouldn’t do much in a global market.
Among the proposals coming to a vote is a push to open oil and gas leasing in the Arctic Ocean, and spots off the East and West coasts. But according to the Energy Information Administration, it wouldn’t really move the needle.
Even if legislation were enacted soon to approve leasing in the Arctic National Wildlife Refuge (ANWR), peak oil production wouldn’t come until 2030 and even then, it would only affect oil prices by 1 percent, EIA administrator Richard Newell told the House Natural Resources Committee in March.
“The unfortunate reality is that they are unlikely to affect the price of gasoline,” said Deron Lovaas, federal transportation policy director at environmental group Natural Resources Defense Council, explaining that it is difficult to control a price subject to volatile markets and geopolitics.
But the impact of expanding drilling may have a symbolic effect, according to Stephen Brown, vice president of government affairs at Tesoro. He said it could simply “have an impact on market psychology.”
Increase Fuel Economy Standards
In response to the push for more drilling, environmentalists say the only way to truly affect high gas practices would be to consume less.
“We have more leverage there,” Lovaas said, explaining that as big buyers, we can effectively lower prices if we push for more fuel economy. Requiring a 60 mile-per-gallon average for new automobiles by 2025, he says, would lower prices at the pump by 20 cents.
And according to EIA’s Annual Energy Outlook data for 2011, America’s reliance on imported fuels will fall in the next 25 years—due in part to fuel efficiency standards.
Though the administration is working toward increasing standards, the standards’ effects on prices aren't guaranteed. Prices will remain subject to forces outside of Washington and any impacts from increased fuel economy standards wouldn’t be felt immediately.
Eliminating Tax Breaks
While the House debates bills aimed at increasing offshore drilling, the Senate is looking to take up legislation to eliminate oil and gas subsidies for the country’s biggest producers.
The gas price refrain returns here as well. Lawmakers say that the companies record profits show they don’t need the help. If the money were invested instead in clean energy, they say, it would do more for gas prices.
“Gas prices are higher. The need for energy independence is much greater. And the oil and gas profits are much higher,” Senate Finance Chairman Max Baucus, D-Mont., who is working on crafting such legislation, said Monday.
But industry says that such proposals would do more harm than good.
"Increasing energy taxes raises costs for businesses, which may impact consumers, and it threatens the 9.2 million jobs our industry supports," American Petroleum Institute President and CEO Jack Gerard said in a statement, adding that removing the subsidies could slow production in the long term and impact consumers.
Clean Energy Investments
Investing in clean energy is essential to reducing the cost of energy for all Americans, Dan Reicher, executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University, told lawmakers in the Senate Energy and Natural Resources Committee on Tuesday.
Energy Committee ranking member Lisa Murkowski, R-Alaska, called the creation of a government body aimed at channeling clean energy investments an “efficient use of taxpayer money,” arguing that even in a difficult fiscal environment, the investments would mean “more bang for our buck.”
But despite the seemingly broad consensus among lawmakers on creating such an office, the chances of it happening remain uncertain without a means to pay for such an endeavor.
Even so, the effects of clean energy investments, even if aggressively put into action, wouldn’t pay off in the near term.
In this regard, winning the future is exactly that. As far as winning the present, investments (if enacted) wouldn’t have any immediate impact on high energy prices.
Want the news first every morning? Sign up for National Journal’s Need-to-Know Memo. Short items to prepare you for the day.