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News :: Economy : Environment : Political-Economy : Regime |
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Oil Giants Continue to Benefit From U.S. Energy Policy;Consumers Pay Price |
Current rating: 0 |
by Consumers Union
(No verified email address) |
08 Aug 2006
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"As gasoline prices and oil industry profits hit record high levels, so too has public frustration and concern," said Ann Wright, senior policy analyst for Consumers Union. "The oil companies continue to be the largest benefactors of our nation's energy policy -- not the American public." |
WASHINGTON - August 8 - One year after the Administration's energy policy was signed into law, consumers are paying record high prices for gas and the majority of the cost increases have turned into profits for domestic oil companies.
"As gasoline prices and oil industry profits hit record high levels, so too has public frustration and concern," said Ann Wright, senior policy analyst for Consumers Union. "The oil companies continue to be the largest benefactors of our nation's energy policy -- not the American public."
"Time to Change the Record in Energy Policy," a report released today by the Consumer Federation of America (CFA) and Consumers Union (CU) shows the following:
-- The increase in the domestic refiner/market spread -- the amount oil companies take for domestic refining and marketing -- since last summer is about 34 cents per gallon, which is more than the increase in crude oil costs (about 31 cents).
-- This increase in the domestic spread adds about $12 billion to summer driving costs for consumers.
-- Compared to 2002, the last time summer gasoline sold at $1.50 per gallon, domestic crude and refining/marketing have accounted for an 85-cent increase in the price of gasoline.
"Because the price increases are not driven by costs, oil industry profits have skyrocketed," Mark Cooper, CFA's director of research, said. "Oil companies will make more money this year than they did in 1995 to 1999 combined. Comparing oil industry profits to the Standard and Poors Industrial, the industry will have $120 billion in excess profits in the 2001 - 2006 period. Cash flow has increased so fast that the industry simply cannot absorb it. Cash flow has exceeded net new investment by $120 billion, yet, Congress continues to lavish favors on the industry."
The report points out that the recently passed legislation to expand drilling in environmentally sensitive coastal areas will do little to lower prices or free our nation from its addiction to oil.
-- About 85 percent of the oil in coastal areas is already available for drilling.
-- The small increment of oil to be drilled in the new areas constitutes less than 2 percent of global reserves.
"The drilling legislation will fatten the oil industry's bottom line, since the oil companies will find 'cheap' oil, but charge the world price," Cooper said.
"While the Administration and Congressional leadership continue to push traditional supply-side strategies by promoting drilling, many of the policies we have been advocating for years are garnering bipartisan support. Congress and the Administration should turn their attention to enacting a meaningful energy plan that includes strong efficiency standards and better oversight of the price raising practices of industry," Wright said.
The report points out that members from both sides of the aisle have cosponsored important proposals to:
-- cut oil consumption and imports by as much as 10 million barrels per day (almost 40 percent) over the next quarter century;
-- dramatically increase auto and truck fuel economy standards;
-- require the Environmental Protection Agency to update miles per gallon estimates on new vehicle window stickers and require manufacturers to use accurate estimates in compliance with federal mileage standards;
-- make mileage information readily accessible on new car stickers, in advertising and even on real-time dashboard displays during driving;
-- empower antitrust and commodity market regulators to scrutinize the price raising business practices of the oil industry and commodity speculators
"These aggressive efficiency measures will 'deliver' five to 10 times as much capacity to the oil market as the drilling bills recently passed by the House and Senate," Cooper noted, "and fuel economy-driven oil savings are sustainable for the long term, while the small increase in production that results from expanded drilling is not."
The report notes that the results of a recent CFA-sponsored public opinion poll indicate that people are ready for a change in energy policy. According to the results, based on a random national sample:
-- Over three-quarters of respondents support requiring major increases in the fuel efficiency of cars, requiring auto companies to boost alternative fuel vehicles from 3 percent to 25 percent of the new car fleet, and making mileage information more readily available as well.
"Hopefully, if the members of Congress get an earful from their constituents during the summer recess, the Congressional leadership will feel the heat and give these important efficiency measures and consumer protection bills votes when they return in September," Wright concluded.
To get a copy of the report, go to http://www.consumerfed.org or http://www.consumersunion.org/pub/timetochangetherecordonoilpolicy.pdf |
Copyright by the author. All rights reserved. |
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Re: Oil Giants Continue to Benefit From U.S. Energy Policy;Consumers Pay Price |
by the price of gasoline
(No verified email address) |
Current rating: 0
09 Aug 2006
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The problem behind the cost of gas isn't the price of oil, its the production costs. Even if the United States had trillions of barrels of oil at its disposal it wouldn't lower costs because we have no capacity to refine it. Environmental regulations are so strict that a new oil refinery has not been built in the U.S. since the 70s. Refining capacity is stretched so tightly that a hiccup in production capacity, from something like a hurricane, cannot be absorbed by other facilities. Another problem is the lack of consistent gas standards. Every state has different regulations as to the way gas is made that it allows to be sold. As a result there are currently 18 different blends of gas being sold throughout the U.S. As for increasing fuel efficiency in cars; it won't do any good. Cars are 60% more fuel efficient now then they were 30 years ago, but the average American drives 83% more now than 30 years ago. Another problem is that in order to meet fuel efficiency requirements safety is being sacrificed. To make cars lighter and consume less gas manufacturers are using lighter, thinner metal alloys. The result is that 2500-3500 deaths a year are now attributed to the reductions in safety due to the increased fuel standards. Our own environmental policies are choking our gas supply and the result is we are paying for fuel efficiency with blood. |
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BP Pipeline Shutdown Highlights Nation's Oil Dependence; Even a One Mile Per Gallon Increase in Fuel Economy Would Erase Shortage |
by UCS
(No verified email address) |
Current rating: 0
09 Aug 2006
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WASHINGTON - August 7 - As BP shuts down eight percent of U.S. domestic oil supply and world oil futures shoot up by about $2 a barrel, our country is again reminded of the vulnerability caused by our oil addiction. According to a Union of Concerned Scientists analysis, the U.S. will spend at least an additional $24 million on oil imports today as a result of the price spike, sending a total of $10 million to OPEC alone.
"The pipeline shutdown reminds us that we need to start kicking our oil habit," said David Friedman, research director of UCS's Clean Vehicles Program. "If all our cars and trucks on the road today got just one extra mile per gallon, we would not even need the 400,000 barrels per day BP has shut down. The U.S. would spend $50 million dollars a day less on gasoline priced at $3 a gallon. Over the course of a year, that would be $18 billion that could be spent strengthening our economy and creating jobs across the country."
While the U.S. Energy Department is preparing to tap into our strategic petroleum reserves to deal with the shutdown, the president and Congress still refuse to tap into available technology and mandate a significant increase in fuel economy standards for cars and trucks. Serious fuel economy proposals targeting increases of eight to10 mpg over the next decade have been put forth in both the House and Senate, but Congressional leaders have not allowed votes on this issue, even though it is the single biggest step that can be taken to curb our oil addiction over the next two decades.
"It's a disgrace that our fuel economy is lower today that it was two decades ago," said Friedman. "Our political leaders should say 'enough is enough' and raise fuel economy standards now."
Formed in 1969, the Union of Concerned Scientists is the leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and secure responsible changes in government policy, corporate practices, and consumer choices.
Web: http://www.ucsusa.org |
