Stop inventing gimmicks in face of oil price increases
Congress has approved a bill that would cut off oil shipments to the emergency Strategic Petroleum Reserve.
Across the country, the notion of paying $4 for a gallon of gasoline is causing alarm. With elections nearing, that alarm has caused politicians to take notice and act quickly. Unfortunately, long-term policy changes are needed in the absence of any genies capable of turning oil prices downward.
Presidential candidates Sens. John McCain and Hillary Clinton recently proposed suspension of the 18.4 cents-a-gallon federal gasoline tax from Memorial Day to Labor Day. Clinton's Democratic opponent, Sen. Barack Obama, correctly called the proposal "pandering," and most Americans were smart enough to recognize it as such.
All three candidates -- and most of Congress -- now want to stop depositing oil into the Strategic Petroleum Reserve, a collection under salt domes along the Gulf Coast. The reserve was created after the 1973 Arab oil embargo to be used in cases of emergency.
The reserve is now 97 percent full at about 700 million barrels, so leaving it at that will not cause much harm. But neither will it do much good. The U.S. Energy Information Administration expects diverting oil destined for the reserve into the market would drop the price of oil -- which just topped $125 a barrel -- by about $2, which translates into 4 to 5 cents a gallon at the pump.
The government directs about 70,000 barrels a day into the stockpile, while the nation uses 20 million barrels a day. The share of the oil going into the reserve is so negligible -- 0.3 percent -- that any reduction of gasoline prices that result from closing off the petroleum reserve would be hardly discernible.
Hawaii has long been saddled with the nation's highest gasoline prices but this week finds itself sixth most expensive at an average of $3.89 for a gallon of regular unleaded. However, it continues to bear the brunt of the skyrocketing cost of oil because about 80 percent of the islands' electricity comes from petroleum.
On the mainland, nearly all the electricity comes from domestic coal and natural gas, nuclear plants and hydroelectric dams. None of those are alternatives in Hawaii, so the state has charted a commendable course to turn to a variety of "green" energy sources -- wind, solar, ocean waves, biofuels, garbage, geothermal and others -- to account for 70 percent of energy needs by 2030. The U.S. Department of Energy has signed on to the plan.
Our political leaders need to recognize that cheap oil will not return and develop strategies to reduce oil consumption for transportation. Congress recently tightened fuel standards for cars and light trucks but needs to do much more to develop other sources of energy.