Written by Rick Santorum
August 8, 2008
By Rick Santorum
It's the gas prices, stupid.
Every politician knows Americans want relief at the pump for their own sake and the sake of the broader economy. The Senate's continued inaction on this issue provides an insight into how the two parties hope to appeal to anxious voters and, more important, how they view high energy prices.
Democrats, including Barack Obama, support increasing taxes and regulatory costs (environmental) on energy producers and consumers (you), limiting exploration for new oil and natural-gas supplies, and mandating conservation. Liberals like Obama have long argued for higher gas prices to force conservation and reduce emissions. The only concern he has expressed recently is that prices have not gone up gradually and that the sudden spike has hit Americans hard.
It's no surprise, then, that the High-Priced-Energy Party has focused on finding a scapegoat for the rapid rise in prices. The culprits? For starters, greedy Wall Street speculators. So, the High-Priced-Energy Party tried to pass a don't-blame-us bill that further regulates the energy futures market, even though the trading activity on these exchanges during the crisis is at or below normal levels. Interestingly, the bill doesn't cover gold or silver speculators, whose commodities have seen similar price spikes.
Republicans, by contrast, favor lower oil and gas prices. Last week, they wanted to offer an amendment to the oil-speculator bill that would allow states to open up areas at least 50 miles off their shores for oil and gas exploration.
The Minerals Management Service estimates that 1.5 billion barrels of oil and 15.3 trillion cubic feet of natural gas lie off the Mid-Atlantic coast. This is just a fraction of what could be produced if we allowed exploration and drilling along the Atlantic and Pacific coasts. Because these estimates are more than two decades old and based on 1970s-era technologies, these reserves may be underestimated by as much as 50 percent, if history is any guide.
But, no. Up to this point, High-Priced-Energy Party Leader Harry Reid has blocked a straight up or down vote on drilling. The Nevada Democrat's reasoning? Only about 25 percent of leases currently held by energy companies are being explored for development. You see, it's not just oil speculators who are to blame for high prices; it's the oil companies themselves. So High-Priced-Energy Democrats proposed a bill requiring that oil companies drill on their current leases before they gain access to other locations.
Why, you might ask, are energy companies not drilling on current leaseholds? Because they discovered there isn't sufficient oil or gas on these lands to justify drilling. So, the Democrats' second answer to high energy prices is to force energy companies to drill, but only on unprofitable poor-producing fields.
The High-Priced-Energy Democrats have used this unused-leases canard to block the More-Energy-Now Republicans' offshore-drilling amendment, and why not? It's a high-octane blend of politics and policy for them. High-Priced-Energy Democrats score cheap political points by beating up on Wall Street and Big Oil while blocking any price-lowering increase in domestic supplies of oil and natural gas. Neat if you don't have to worry about filling your tank or heating your home.
Securing an adequate energy supply is critical to the nation as a whole, but could prove especially important to the Delaware Valley in particular. Environmentally friendly exploration off our coast would mean economic development across our region. New Jersey and Delaware would see an infusion of oil and natural-gas jobs. Southeast Pennsylvania - already home to three oil refineries - would see an expansion of this key sector of our local economy. The ports of Philadelphia and Wilmington, as well as nearly every other port along the Eastern Seaboard, would see increased activity and employment growth.
Yes, it would take a few years for new refineries to come online. But by opening these areas to exploration, the price of crude oil would drop. It would signal to tyrants like Hugo Chavez of Venezuela and commodities speculators that we are serious about reducing our dependence on foreign sources of energy. Once online, millions of barrels of our oil and natural gas would flood the commodities markets, allowing the economic laws of supply and demand to work in our favor.
Even more, the added influx of oil and natural gas would buy our nation time to develop the next wave of energy technologies. We need to use our vast coal reserves and encourage advancements such as waste coal-to-liquid fuels and coal gasification to strengthen our electrical grids. We need to invest in the next generation of biofuels to ensure they are energy efficient and not a cause of escalating food prices. And we need to follow the lead of France - yes, France - and build additional nuclear power plants, something we have not done in 30 years.
Now that would be a change in energy policy we could believe in.
Rick Santorum is a former U.S. Senator from Pennsylvania (1995 to 2007) and is currently a Senior Fellow at the Ethics and Public Policy Center. This op-ed originally appeared in The Philadelphia Inquirer on July 31, 2008.