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Crude Behavior: The oil industry's influence over America's energy policy "It's like deja vu all over again." A False Choice: Increasing Supply Ending our Dependence on Foreign Oil Conclusion Once more, oil prices are rising because OPEC-- a cartel of oil producing countries-- is manipulating supply to increase profits. Once more, we find ourselves vulnerable and victimized by our dependence on foreign oil. And once more, Americans, tired of being jerked around by the cartel, look to their leaders for real solutions. But instead of using the last quarter-century to reduce America's oil dependency, Congress has kowtowed to the oil companies and auto industry -- refusing to encourage American car companies to make more fuel efficient cars and voting against research and incentives for alternate energy use. March 24, 2000 is the 11th anniversary of the Exxon Valdez oil spill. The beaches still soaked with oil serve to remind us that our dependence on oil carries long term, perhaps permanent, environmental consequences. Now some members of Congress are using the oil price hike as an excuse to renew their calls for drilling the Arctic Refuge. Clearly, destroying one of the most spectacular places on the planet is too high a price to pay for politics as usual. America can break its dependency on OPEC. In the short-term, we should renew our ban on exporting Alaskan oil to lower prices at the pump for hard-working Americans. But the long-term solutions lie in reducing our dependency on oil by making a car go longer on a gallon of gasoline, using alternate energy sources and enacting real campaign finance reform to reduce the influence of the oil and auto industries over our nation's energy policies. Twenty-five years ago, Congress did respond to an oil crisis by enacting what has proven to be the most successful energy savings measure it has ever adopted-- the program setting Corporate Average Fuel Economy (CAFE) standards for cars and light trucks. By requiring automakers to double the average fuel economy of cars between the late-1970s through the late-1980s, Congress ensured that the U.S. would be saving 3 million barrels of oil every day. Without these savings, the U.S. would be importing at least 1.5 million barrels a day more oil than we currently do. Today, demand for gasoline is at an all-time high and growing. In large part, this increase in demand is due to the transformation of light trucks into passenger vehicles. When Congress passed the CAFE law, it did not require automakers to steadily improve light truck fuel economy because these vehicles comprised only 20% of the vehicle fleet and were primarily work vehicles. Today, Sport Utility Vehicles and other light trucks are nearly 50% of the new vehicles sold, driving down average fuel economy and driving up demand for oil. Since 1996, Congress has bowed to auto-industry pressures to block new fuel economy standards. By attaching riders to Department of Transportation funding bills since 1996, Congress has prevented the Administration from acting to reduce demand for oil by improving fuel economy standards for light trucks. Fuel economy for these vehicles has been stuck for 19 years despite their increasing percentage of the fleet. Big Money blocks Real Reform During the 1997-98 election cycle alone, the Big Oil and Automotive lobbies gave $33.5 million in contributions to candidates and political parties according to the Center for Responsive Politics. These contributions increase the congressional influence of individual and corporate donors, who are lobbying hard to defeat common-sense rules to increase fuel economy. Ultimately, the current campaign system gives disproportionate power to special interests, allowing them to dominate our democracy and silence citizens and grassroots groups. One vote that demonstrated the power of the oil lobby was the 1995 vote to remove the Alaskan oil ban. Big Oil fought to remove the ban to raise prices, and their allies in Congress, many of whom are clamoring loudest to drill the Arctic, put oil profits first. On average, Senators voting to end the ban on exporting Alaskan crude oil received 5.3 times more money from oil and gas political action committees (PAC) from 1991 to 1996 than did Senators who voted "no," according to research by the Center for Responsive Politics. (http://www.opensecrets.org/pubs/cashingin_104th/25roy1.html). In the House, supporters of the ban received more than 3 times the amount of opponents in 1995 and 1996. Another example is the vote on Senate Amendment No. 1677 (9/15/99). The Senate refused to reject a rider passed by the House of Representatives that freezes miles per gallon standards for cars and trucks. The rider, part of the House spending bill for the Department of Transportation, blocked the agency from even studying the possibility of raising fuel economy rules, even though higher fuel economy standards are the biggest single step to eliminating America's dependency on foreign oil. No more powerful statement can be made of the control Big Money has over Congress than the fact that most of Congress refuses to even study the issue of raising fuel economy. With Congress in the pockets of Big Oil and the automotive industry, America will never break its dependence on foreign oil. III. A False Choice: Increasing Supply To many the solution to ending our dependence on foreign oil is simple: increase domestic supply. While close to half our oil is produced domestically, the U.S. has less than 3% of the world's known oil reserves. The numbers will never add up to oil independence. And our oil deficit is only getting worse. The U.S. currently imports 55% of its oil. At the height of the oil crisis in 1975, the U.S. imported just 35% of its oil. Within the next few years the U.S. Energy Information Agency projects that we will be importing nearly two-thirds of our oil. The persistent and growing dependence on foreign oil leaves American families vulnerable to oil exporting nations led by OPEC. The recent decision by OPEC to reduce oil supply to the world market in order to increase profits is having a direct impact in the U.S. and serves as yet another reminder that our economy and economic growth are at the mercy of foreign countries. Where does oil go? Oil meets 40% of our energy needs. The transportation sector is the leader in oil demand, with motor fuels accounting for 65% of consumption-- mostly in the form of gasoline. In fact, cars and light trucks alone guzzle 40% of the oil consumed in the U.S. Demand for gasoline has been steadily rising since 1998, in large part due to the boom in light truck sales, especially sport utility vehicles. Today, about half of all new vehicles sold in America are light trucks. Many of those are SUVs, which average 12-16 mpg. The most noticed consequence of our dependence is the price of a gallon of gasoline at the pump. Prices at the gas pump in early March are 53% higher than last year-- upwards of $1.50 per gallon for regular unleaded gasoline. But the consequences of oil dependence go far beyond draining consumers pockets at the pump. Oil dollars account for $50 billion of our national trade deficit. Oil has extensive environmental impacts that begin with drilling and continue through to burning it in our cars and light trucks. The military costs of protecting oil from the Persian Gulf include defending oil-producing nations as we did in the 1990 Gulf War. And the greatest long-term costs: Demand for oil creates a constant pressure to drill in our pristine wilderness areas, particularly the Arctic National Wildlife Refuge and also off the coasts of California, Florida and other states. The Arctic National Wildlife Refuge Consumers facing high prices at the pump want solutions. But the United States can never drill its way to energy independence. Though some say the answer to our nation's energy needs lie below the surface of the Arctic National Wildlife Refuge, this spectacular landscape need not-- and must not-- be sacrificed for a few barrels of oil. Ninety-five percent of Alaska's vast North Slope is already available for oil and gas exploration and leasing. The coastal plain of the Arctic Refuge represents the last 5% that remains off-limits to drilling. But Big Oil wants it all. The coastal plain of the Arctic National Wildlife Refuge is America's Serengeti. Nestled between the towering mountains of the Brooks Range and the Beaufort Sea in northeast Alaska, the narrow 1.5 million acre coastal plain is the biological heart of this untamed wilderness. It is home to unique and abundant wildlife: wolves, polar bear, musk ox and wolverine. Myriad bird species rely on the coastal plain for breeding, nesting and migratory stopovers on trips as far away as the Baja peninsula, the Chesapeake Bay, and even Antarctica. The coastal plain is also the calving grounds of the 129,000 member Porcupine River Caribou Herd who migrate over 400 miles each year to this same place to give birth to their young. This migration is reminiscent of the buffalo that once roamed the Great Plains. The coastal plain is also sacred ground to the Gwich'in Indians, a 20,000 year old native culture whose subsistence lifestyle depends upon the harvest of caribou. Their villages are strategically located along the migration routes of the caribou herd, and they depend on the animal for food, clothing, medicine and their cultural lore. The Gwich'in people fear that the oil development in the calving grounds of the caribou will disrupt the herd, cause a decline in caribou population and ultimately jeopardize their traditional way of life. The wildlife and the native culture that depend upon the coastal plain are at risk because it is precisely this coastal plain that Big Oil wants to open to drilling and development, claiming that vast quantities of oil lie beneath the fragile tundra. But truth be told, no one knows how much, if any, oil lies beneath the coastal plain of the Arctic Refuge. The United States Geological Service (USGS) has conducted multiple studies of potential oil reserves and the estimates have fluctuated dramatically. Even in its most favorable estimate, the USGS published a determination of the mean estimate of economically recoverable oil as 3.2 billion barrels of oil. That's less than a six-month supply at current consumption rates and even at peak production, arctic oil would represent only 2% of total U.S. daily demand. Plus, it would take 10 years before any oil began to flow. But it doesn't matter how much or how little oil may lie underneath the coastal plain. Drilling the Arctic Refuge would be as shortsighted as damming the Grand Canyon for hydroelectric power or tapping Old Faithful for geothermal energy. It would be as foolhardy as burning the Mona Lisa to keep you warm. America is losing our remaining wildlands at an alarming rate. We must have the foresight to protect one of America's most spectacular natural treasures-- not sacrifice it for a minimal amount of oil. Proponents of drilling argue that the impact of oil development on the arctic environment will be minimal. But one need only look to the history of environmental abuse at the Prudhoe Bay oil fields 60 miles to the west to question that assertion. Prudhoe Bay is a massive industrial complex sprawling 800 square miles across now-ruined tundra. Oil development of the coastal plain will require hundreds of miles of pipelines and roads, numerous drilling pads, production wells, waste pits, airstrips, and dorms. Such a massive industrial facility will forever destroy the pristine wilderness of the Arctic Refuge and once it's gone, it's gone forever. The Arctic National Wildlife Refuge is public land, which belongs to all Americans and should be protected for future generations to enjoy, explore, and discover. Restore the Ban on Exporting Alaskan Oil Ironically, those who are clamoring loudest for drilling the Arctic to "lower" prices are the same people who fought to lift the export ban on Alaskan oil in an effort to raise prices. Senator Frank Murkowski, for example, insists America needs Alaska's oil for energy security. If that is the case, why did he fight for and win the right to export Alaska North Slope crude to the Far East? Today we export 50-90,000 barrels of Alaska's oil to Asia every day. Restoring the ban would do more to bring down the price of oil on the West Coast, where most of it is shipped and do so more quickly. According to a report by the General Accounting Office, "lifting the exported ban raised the relative prices of Alaskan North Slope and comparable California oils between $.98 and $1.30 higher per barrel than they would have been had the ban not been lifted." And much of the real proof that lifting the export ban raised prices comes from Big Oil itself. According to a March 14, 1995 article in the Anchorage Daily News, "For British Petroleum, the North Slope's largest producer, lifting the oil-export ban is a piece of a larger market strategy to drive up prices." Additionally, the government knew four years ago this would lead to higher prices for West Coast families. "According to the U.S. Department of Energy, lifting the ban will end a glut of Alaska oil on the West Coast that has dampened prices. Its end should _ increase North Slope development profits for producers and the state," the Anchorage Daily News reported on November 9, 1995. The Administration should listen to Reps. Peter DeFazio, George Miller, and others who call for restoring the export ban. Under the authority granted to him, the President can restore the ban on exporting Alaskan oil. This immediate step will provide relief to working families and protect our environment. In case the president does not act quickly, Reps. DeFazio and Miller have introduced legislation to restore the ban. IV. Ending our Dependence on Foreign Oil Raising Corporate Average Fuel Economy (CAFE) standards to 45 miles per gallon for cars and 34 miles per gallon for light trucks would save well over 2 million barrels of oil per day, according to the American Council for an Energy Efficient Economy (ACEEE): far more than estimates of oil in the Arctic Refuge. Although Congress responded to the oil crises of the 1970s with a sound policy to reduce consumption, it has since bowed to auto-industry pressure and refused to raise the fuel economy standards set back in the 1970s and has blocked new standards for administering. According to the ACEEE, had CAFE standards risen at a moderate and steady pace since 1994 -- a rate of 6% a year -- we would be saving 830,000 barrels or 34.9 million gallons per day. Our vulnerability to OPEC's manipulation would have been greatly reduced and consumers would have more efficient vehicles and be paying less at the pump to fill up. Today's high prices at the pump are the result of high demand in the face of a small shortfall in world oil supply. Globally, oil consumption is 2 million barrels of oil per day more than supply because of OPEC's decision to cut back on production by 4 million barrels per day. The U.S. alone consumes about 18 million barrels a day. The U.S. share of this shortfall is about 400,000 barrels per day. CAFE standards alone would have taken care of the U.S. share of excess demand according to analysis by the American Council for an Energy Efficient Economy. And, if that consistent increase continued through 2007, the U.S. would save 3 million barrels of oil per day. By the time Arctic oil could begin to flow in 10 years, we could have saved much more than we could ever hope to get from the Arctic and preserved a pristine wilderness area for the future. Now that higher oil prices are here and the consequences of congressional inaction on saving oil are hitting home, Congress must shift course and plan for the future. Congress should act now to ensure that we are well protected from future manipulations by OPEC and the oil industry. An initial step of raising fuel economy standards for light trucks from the current 20.7 to the same level as cars, 27.5, alone would save 1 million barrels of oil per day. Moving technology off of the shelves of Detroit and into new cars and light trucks will begin to save oil and put the U.S. on a course of oil independence. Eighty-six percent of the fuel economy gains achieved under the existing standards came from technologies such as better engines, transmissions, and aerodynamics. Using 21st Century Technology in American Cars and Trucks The technology exists today to improve fuel economy without impeding safety or causing inconvenience for motorists. However, the auto industry makes its largest profits from gas-guzzling SUVs and doesn't want to invest to improve their product. The 65 mpg Honda Insight, powered by a hybrid engine, is now on sale in U.S. showrooms, and the Toyota Prius Hybrid will be on sale soon. Hybrid engines, combining gasoline and electric power could make many improvements in fuel economy. These reasonably priced vehicles ($18,000-20,000) offer astronomical improvements over current mileage. The Prius has a fuel economy of roughly 55 mpg and can go over 850 miles on a single tank of gasoline. And the Insight was recently praised with the first product endorsement award in Sierra Club history, the Award for Excellence in Environmental Engineering. If Congress is serious about ending our dependence on foreign oil, they should make auto companies give consumers the choice to buy fuel-efficient vehicles. The Big Three automakers' response is a few diesel prototypes, despite the American people's desire to end our oil dependence. This would not be a burden on the auto industry for two main reasons: 1) Change cannot happen overnight, it must be gradual and steady: A 60% improvement is achieved over the course of years. That's why the auto industry should increase fuel economy by an average of 6% a year for the next decade. This improvement is achievable with current technology. 2) Consumers will have more choices: The American people deserve more choices, not less. That's why CAFE standards are fleet averages. For every fuel-efficient Insight or Prius a company can still produce some gas-guzzling SUVs. But Americans need more options on the higher end of the spectrum to achieve this balance. Investing in Renewable Energy Although many congressional leaders are now calling for immediate action to reduce gasoline prices, they have blocked efforts to increase energy efficiency and reduce oil consumption. In the last two years, Congress has significantly under-funded the Administration's proposals to:
There was an effort made in the Senate last year led by Sen. Jim Jeffords (R-VT) to add $62 million to solar and renewable energy programs, but it was defeated. In the last two years, Congress cut $7.4 billion from the Administration's efforts to reduce our consumption of energy. These programs would have saved business and consumers $70 on their energy bill for every $1 invested in these programs, which might have mitigated the cost of rising gasoline prices. Weatherization When the Northeast was hit with a cold snap in February, the high cost of home heating oil was a major issue. Congress, since 1995, has slashed funding for important programs that would help reduce oil consumption and improve energy efficiency. In Fiscal Year 1996, the energy efficiency budget was cut by 30%. Energy efficieny helps to reduce demand and save consumers money. In addition to cutting funding for energy efficiency programs in general, Congress has slashed funding for the Weatherization Assistance Program, a program that provides essential services to low-income families. The program provides up to $2,000 per household to weatherize homes-- improving insulation, windows, furnaces, etc. Weatherization has been shown to improveme a home's efficiency by 23%, which would decrease demand for oil and save money in the long-term. Low-income families were the hardest hit by high oil prices in a cold snap. By slashing funding for the weatherization program Congress ensured that homes were less efficient and required more oil to provide much needed warmth. In the midst of the crisis, the President proposed releasing funds from the Low Income Home Energy Assistance Program to provide help to low income families. Congress must invest in programs like Weatherization to insure that the most vulnerable members of society are not left in the cold in the future. Campaign Finance Reform The American people want a Congress that offers real solutions to break our dependence on foreign oil-- a Congress that is willing to allow our government to research ways to increase fuel economy and offer long-term solutions. However, that will never happen as long as campaign contributions from Big Oil and the auto industry have Congress in their grasp. The answer lies in real campaign finance reform which would place limits on special interest funding on campaign spending and eliminate soft money contributions to political parties. Real reform would eliminate the influence of Big Oil's lobby and its allies in Congress whose actions keep America dependent on foreign oil. Real reform would shift power back to voters and volunteers and would restore the public's confidence in our democracy. The first step is for the Senate to finally approve the McCain-Feingold bill to eliminate "soft money," which is how Big Oil gives most of its money to Congress http://www.opensecrets.org/ Solutions:
If there's one thing that all sides can agree on, it's that this issue won't go away by itself. We are far more oil-dependent today than 25 years ago. And unless we demand change, we will continue to be vulnerable and manipulated by oil producing nations. Drilling the Arctic is not the solution. At our current level of consumption, there is no chance domestic production can equal demand. That's why we need a responsible Congress that isn't in the pocket of Big Oil to enact real solutions. We have the technology and national will to finally end our dependence on foreign oil. We need a Congress with the courage to fight now for working families and to protect America's environment. Up to Top |
