Politicians offer plenty of gas prices fixes
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As the cost of gas hovers around $4 a gallon, politicians of all stripes know that many voters are demanding solutions. And as drivers fill up, the candidates are hoping to remind them that they're working on both short and long term fixes.
"The reason why we're here today in front of Sinclair gas station is to highlight the grief that Minnesotans are going through right now regarding the high price of gasoline," GOP Rep. Michele Bachmann said last month.
"We need to make sure that people aren't manipulating the market. We need to go after price fixers, energy market speculators, price gougers and others who are driving the prices higher," said U.S. Congress 2nd district DFL candidate Steve Sarvi earlier this week.
"We need to drill more. We need to do exploration. We have to produce more oil and consume less," said GOP Sen. Norm Coleman.
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"There are over 91 million acres of public land leased and licensed and ready to go to the oil companies that they already hold. Sixty-eight million are not being drilled upon as they set," said DFL Rep. Tim Walz.
Over the past two months, high gas prices have dominated the political debate. Some candidates have held news conferences at gas stations. Others appeared with business owners who are struggling with the cost of fuel.
The list of daily news conferences on energy is almost as long as the list of solutions.
Republicans want to lift restrictions on drilling along the coasts to get more oil into the marketplace. Republican Congresswoman Michele Bachmann wants to take it a step further and drill in the Arctic National Wildlife Refuge in Alaska. She said last month that more drilling won't produce oil right away, but it would send a message that the United States is serious.
"If we change what we do, we are such a big market, it has a huge impact internationally,"
"We'll see a beginning of a downward pressure at the pump, if we send the signal to the marketplace that we're going to open up American energy reserves and begin exploration," Bachmann said.
Recent polling suggests more Americans are open to expanded drilling. But many Democrats say there's no need for more drilling, when oil companies aren't taking advantage of the permits they already have.
DFLer Steve Sarvi is challenging Republican Congressman John Kline in Minnesota's 2nd Congressional District. He says that gas and oil companies need to use the permits they already have.
"Despite the fact that this land is thought to be capable of producing millions of barrels of oil and billions of feet of natural gas each day, they need to either use the leases or give them up so someone else will," Sarvi said.
Other proposals include reigning in the oil market, cutting tax breaks for oil companies, telling President Bush to "jawbone" oil executives to lower fuel prices, and taxing excessive oil profits.
"There's definitely no silver bullet," said Amy Myers Jaffe, an oil expert with Rice University in Texas.
"The key silver bullet is if we all stop driving, then the price would go down, but that's not a good solution," she said.
Jaffe said passing a few laws won't make much difference. However, she said if Congress takes comprehensive action, that could reduce the price of oil.
Jaffe said higher fuel efficiency standards on cars, which would lower demand, and increased drilling, which would boost supply, should both be on the table.
"If we change what we do, we are such a big market, it has a huge impact internationally," Jaffe said.
Jaffe recommends a few things in the short term. First, she says the Bush Administration should sell off some of the oil in the nation's strategic oil reserve.
Jaffe also said the U.S. should require oil companies to keep a minimum amount in reserve. She said Japan and several European countries have those laws so weather trouble, labor unrest and foreign incidents don't spike prices.
"We know from studying markets and studying inventories that that is one thing we know that would definitely work to smooth out price spikes," Jaffe said.
In terms of the market, Jaffe said oil speculators are exploiting a loophole that allows them to buy massive amounts of oil contracts. She said Congress should tighten the market and require greater disclosure.
"It's not a good idea to have unregulated markets for speculation for something as important as oil," Jaffe said.
"Prior to 2000, the market speculative limits and you had to register your trading position, and I don't know why we went away from that. We have to go back to that," she said.
Jaffe compares the oil market to the housing and dot com bubbles that occurred over the past decade. She said the only way to pop the oil bubble is to convince speculators that demand will go down and production will go up. Until that bubble bursts, the candidates will continue to offer solutions to try to appease voters.
