Oil Exploration Needed Today to Reduce Gas Prices

June 26, 2008

Oil Exploration Needed Today to Reduce Gas Prices

Sensenbrenner: Congress Missed Chance 20 Years Ago, Now We’re Paying

Washington, D.C., June 26, 2008- U.S. Rep. Jim Sensenbrenner, R-Wis., ranking Republican on the House Select Committee on Energy Independence and Global Warming, made the following statement during today’s hearing titled, “$4 Gasoline and Fuel Economy: Auto Industry at a Crossroads:” 

“The topic of this hearing, $4 gasoline and fuel economy, I think is symptomatic of why we have a big problem in this country.  We have $4-a-gallon gasoline today because we have deliberatively not exploited our domestic resources. 

“While I’m the first to say we can’t drill our way out of high gas prices, locking up all of our domestic resources and not wanting to drill practically anywhere where it is economically feasible, has contributed to the high gas prices.  And while it will probably take 10-20 years for us to fully benefit from drilling in the outer continental shelf and other places, had we started that 10 or 20 years ago, maybe we wouldn’t be in the pickle we’re in today and our constituents and consumers wouldn’t have to suffer the cost of the high gas prices. 

“Now overlaying all of this is the increase in the CAFE standards that the chairman is very proud of.  Listening to what he said today when CAFE was first passed in 1975, we saw a huge decrease in the percentage of imported oil.  Well, what’s happened? We passed CAFE, the percentage of imported oil has gone up and meantime the majority party two or three times has passed legislation that has repealed domestic production tax credit for developing domestic resources which makes it cheaper for the oil companies to buy more oil overseas. 

“Now the result of all of this is starting to show up in lost jobs and the loss of good paying jobs.  The major employer in Janesville, Wis. is General Motors.  They make SUVs there. There are highly skilled, highly paid members of the United Auto Workers that will be losing their jobs between now and 2010 because GM has decided that the market is not going to support having a full-fledged production facility for SUV vehicles that are made in Janesville, Wis.   

“All of these people are going to lose their jobs. And they are going to lose their jobs because of the short sightedness of people who say we can’t drill; we ought to increase taxes on the domestic production of oil; we ought to raise CAFE standards so that these types of vehicles can’t meet them and effectively legislating themselves out of the market. This is the type of attitude where people go around saying Congress knows best and we know what’s good for you rather than you know what’s good for yourself in deciding how you’re going to spend your dollars. 

“I’m particularly disturbed -- given what’s happened in Wisconsin with the big GM plant closing and a lot of UAW members being thrown out of work -- that we invited someone from Nissan here to talk about this.  

“Nissan is a Japanese company and it seems to me if we want to keep production in the United States and we want those profits to be patriated in the United States rather than being sent to a foreign country, we ought to be working with General Motors, Chrysler and with Ford to develop solutions rather than providing a forum for a representative from a Japanese company. 

“Now there are all kinds of solutions that are on the table.  One of the solutions that we have been discussing in this committee is cap-and-tax.  And that’s what it is, because it will be a tax on fossil fuel energy production.  Whether it is electricity, whether it is gasoline, or whether it is natural gas. 

“There have been several economic studies that the Lieberman-Warner and the Markey bills which impose a cap-and-tax regime will increase the cost of gasoline by 150 percent, plus or minus.  That’s a $10 a gallon cost for gas. That’s assuming that no inflation will take place over the period of time that the study runs. 

“If we all think our constituents are having a bad time at $4-a-gallon gas, imagine the consequences of $10 a gallon gas, because raising the price of gas is a regressive way of raising money whether it is through cap-and-tax or whether it is through market economics. 

“So the solution that is being proposed on the other side is unacceptable.  It is one that will really dislocate the American economy and particularly poor people who have to commute to and from work.  These are bad solutions and no wonder that the United Auto Workers and United Mine Workers have come out against both the Lieberman-Warner bill and the Markey bill, which will effectively put their businesses and their workers -- who are mostly Democratic voters, I might add -- out of jobs and out of business. 

“So let’s start using market economics rather than having hearings complaining about $4-a-gallon gas because what’s being proposed on the other side is going to raise that 150 percent.”

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Select Committee on Energy Independence and Global Warming - Republicans
H2-344 Ford House Office Building
Washington, D.C. 20515
Phone: (202) 225-0110 | Fax: (202) 225-0095

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