High Fuel Prices
Mr. Speaker, I am sure that most Members spent time touring their districts in August, and I did as well. The major complaint that I heard was what probably most Members heard. That was concern about high fuel prices. We all know that fuel…
Mr. Speaker, I am sure that most Members spent time touring their districts in August, and I did as well. The major complaint that I heard was what probably most Members heard. That was concern about high fuel prices. We all know that fuel for automobiles, trucks, and airplanes have simply gone out of sight. One thing that we are not probably quite as aware of as a Nation is what it has done to agriculture, particularly where irrigation is concerned.
I talked to one Member of Congress who does some farming and irrigating. He was telling me that he had one center pivot that was powered by electricity; it cost him $1,000. He had one center pivot that was powered by either diesel or propane; that was $4,000. Same pivot, same size, and normally electricity would be higher than diesel or propane. So fuel has really eaten into the farm profits this year, and it is going to make farming very unprofitable for many people.
What has happened? Obviously, one major issue has been that global demand has increased. We realize that China, India, countries like these, have been industrialized, and over the last 4, 5, 6 years have been using much more fuel.
Number two, exploration has been curtailed. A 1998 executive order extended a moratorium on offshore drilling for 10 years. It is assumed that these areas would contain 75 billion barrels of oil and 362 trillion cubic feet of natural gas, but they are off limits. Federal law restricts access to resources in the Rocky Mountains and the Gulf of Mexico. Drilling in ANWR has not been allowed; and so whichever side of the environmental fence you are on, whether you agree or disagree, it certainly has made it more difficult to meet our fuel demands. Natural gas prices have increased 83 percent over the last 3 years, and this will cost our economy roughly $111 billion, and a lot of this is simply because of a shortage of natural gas, at least that is available to us; and we have a tremendous amount of it in Alaska and other places we are not able to get to.
Number three, refinery capacity has been reduced due to obsolescence. As a refinery gets old and equipment begins to go downhill, rather than being replaced, it simply is retired; and we have lost 30 percent of our refinery capacity since 1976. For the last 30 years,
we have been steadily losing capacity; and this, again, is mostly due to environmental regulation. We have mandated also 13 blends of gasoline. These are called boutique fuels, which add expense and time to fuel refining; and of course, in many cities, like Chicago, you may have to have three or four different fuel blends in a year. Every time you change a blend, you shut down the refinery, you clean the pipes and you start over again; and, again, that adds to expense. Katrina's destruction of refineries has pushed us over the brink. Obviously, just losing 5 or 10 percent, with such a thin margin, has made it somewhat inoperable.
Four, we have increased reliance on foreign oil, which everybody realizes. We are nearly 60 percent dependent on foreign oil at the present time. Much of this is from OPEC. So they can simply have a meeting, tighten the screws and prices go up. This contributes greatly, this dependence on foreign oil, to a $670 billion annual trade deficit, which this country simply cannot continue to sustain. We have to get more energy-independent, obviously.
I guess fifth, something that is in everybody's mind, is has price gouging occurred? To be honest with you, I do not know. I do not think anybody at this point knows, but I do know this: E85, that is 85 percent ethanol, was $1.60 in my State of Nebraska 4 weeks ago. Today, it is $2.75, an increase of $1.15 in 4 weeks. Katrina did not have anything to do with that because the cost of corn has remained low. All of the ethanol manufacturing is done in the Midwest, and so the hurricane had nothing to do with this issue. I think these are things that have to be looked into, probably by Congress.
The solution eventually, I hope, will be, what we have in our energy bill, will eventually provide relief, ethanol, biodiesel, solar, wind energy, nuclear, hydrogen fuel cells, and I think some additional refinery capacity; but it is all going to take time. This will be a difficult time, and I think Congress probably really needs to do some soul searching and look at some of the regulations we have placed upon ourselves.