More oil supply

In May of 2007, I wrote Why are gas prices high, and what can we do about it? At the time, the national average price for a gallon of regular unleaded gasoline was $3.22.

The national average price is now 59 cents higher, at $3.81 per gallon. That’s down 30 cents from a high of $4.11 in early July.

In June of 2007, here’s what I wrote.

Q: So what can the government do about [high gas prices]?

A: In the short run, almost nothing. In the long run, the President has proposed to:

  1. lower demand by increasing fuel economy standards (“CAFE”), and also to reform the way those standards are measured, to encourage sound science, safety, and keep costs low
  2. increase our domestic oil supply by drilling for more oil, both in the Gulf of Mexico and off the Alaskan and Virginia coasts (these are already underway), and in Alaska (we need Congress to change the law)
  3. increase our supply of alternative fuels by expanding something called the Renewable Fuel Standard, mandating that more of our fuel come from ethanol (from corn and, eventually, other plant sources), and expanding it to include other alternatives like electric vehicles, plug-in hybrids, and coal-to-liquids
  4. increase our insurance policy by doubling the size of the Strategic Petroleum Reserve. The SPR is a few big holes in the ground where the nation stores oil, just in case there’s a severe supply disruption
  5. and, most importantly, encourage the development of new technologies on both the supply side and the demand side. The President has proposed increased federal R&D funding for cellulosic ethanol, batteries and plug-in hybrid vehicles, and even a “Hydrogen Fuel Initiative”in the long run.

#1, #3, and #4 are the President’s new “20 in 10” proposal that he rolled out in the State of the Union address this year. Together, they would reduce our gasoline usage by up to 20% within 10 years (by 2017). If you want to learn more about our “20 in 10” energy proposal, you can find a good description here.

The solutions take years to have a big effect. We’re urging the Congress to take those long-term actions now. It’s taken years to get to this point, and it’s going to take us years to work our way out of it. But that’s no excuse for not […]