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Think about it for a minute
Posted 15 July 2013 in
If there’s one thing most people can agree on, it’s that consumers constantly feel the pinch of high gas prices. In 2012, Americans spent the highest percentage of household income – nearly four percent – on gas in nearly thirty years. And while consumers are hit with wallet-draining gas prices every day, oil companies continue to make huge profits — $118 billion alone last year. Even worse, the oil industry is exploiting high gas prices to justify additional domestic drilling, despite the fact that record drilling in the US has failed to slow gas prices. That’s why tomorrow the Senate’s Energy & Natural Resources Committee will convene a hearing to find out why gas prices remain stubbornly high, despite a new wave of domestic oil production.
Here’s what you need to know:
More drilling isn’t the answer
Oil prices are set on a global market that is subject to factors like unrest in the Middle East. A recent report from the International Energy Agency predicted that drilling our way to energy independence will leave us with oil costing $215 per barrel.
Often times, refineries fail to pass on the lower costs to consumers and hitches during production lead to skyrocketing gas prices, meaning a drop in the price of crude oil does not necessarily translate into cheaper gas for consumers.
The price shocks associated with a volatile oil market not only impact hardworking Americans, diminishing disposable income that would have been spent elsewhere, but they also affect national security. Leaders have long agreed that fluctuating prices hamstring the military’s planning and budgeting processes, leaving our troops on the ground vulnerable.
Renewable fuel is the clear solution
Renewable fuel already provides 10% of America’s fuel needs and that number is growing. Increased access to homegrown renewable fuel has provided consumers with choice at the pump, given consumers savings from decreased gas prices, and reduced our dependence on foreign oil.
In 2011, gas prices were reduced by $1.09 per gallon and the average American household saved $1,200 on their gas bill thanks to renewable fuel.
Americans saved approximately $50 billion in imported fuel costs thanks to renewable fuel in 2011.
Cellulosic renewable fuel (made from things like algae or switchgrass) is coming online, with the EIA predicting 250 million gallons of capacity by 2015, setting the stage for a future with an even more diverse, clean and homegrown fuel.
The USDA and DOE have estimated that there is enough biomass in the United States to replace nearly a third of the country’s gasoline with renewable fuel by 2030.
In order to further reduce our reliance on oil and ease consumer pain at the pump, we must continue to support policies such as the Renewable Fuel Standard (RFS) that are creating a competition in the transportation fuel sector. Without the RFS and support for homegrown renewable fuels, our nation will be left with a virtual oil monopoly that continues to consume high carbon petroleum transportation fuels, priced at the whim of the global market leaving American families vulnerable and struggling for stability. We must protect consumers by protecting the RFS.
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