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Morning Bell: Higher Gas Prices Add to Economic Slump

Posted By Amy Payne On August 9, 2012 @ 8:41 am In Ongoing Priorities | Comments Disabled

Unemployment is at 8.3 percent. The economy is sputtering at 1.5 percent growth. Food prices are rising due to drought conditions across the country. And gas prices are up again, pinching Americans’ summer budgets. It is past time for the President and Congress to pursue smart policies that would put us on a path to relief.

According to AAA’s Fuel Gauge Report [1], the current national average for regular is $3.66 per gallon. That’s up 28 cents per gallon from a month ago, and July had its biggest price jump since AAA started tracking prices in 2000.

There are many factors affecting prices that we cannot control—worldwide tensions, especially in the Middle East, can drive up oil prices. Global demand, especially from China and India’s rapidly growing economies, continues upward.

But after three years of adding regulatory hurdles and blocking exploratory access and development, President Obama’s policies are helping keep prices higher than necessary.

If the President truly wanted to lower gas prices, he would work to increase supply. But when given the opportunity, he has done the opposite. He turned down the Keystone XL pipeline, which would bring up to 830,000 barrels of oil per day from Canada. His Administration has made it even harder for companies to explore and extract domestic energy resources by canceling, delaying, or withdrawing a number of lease sales for exploration and development. Meanwhile, huge swaths of federal lands have been put off limits for energy exploration.

Domestic refinery outages have had a recent impact on gas prices. Two of the factors holding back domestic energy production are regulatory red tape and litigation—and these, we can do something about. As Heritage’s Nicolas Loris notes [2]:

Environmental activists delay new energy projects by filing endless administrative appeals and lawsuits. Creating a manageable time frame for permitting and for groups or individuals to contest energy plans would keep potentially cost-effective ventures from being tied up for years in litigation while allowing the public and interested parties to voice opposition or support for these projects.

We don’t have to stand still. Congress could alleviate the energy crunch in 10 different ways [3] by taking action on things we can control, like restrictions on oil shale development and offshore drilling.

One of the most common objections is that increasing domestic oil production takes too long and would not impact the market for at least a decade. The longer people make this argument, however, the longer it will take. The sooner we make investments in domestic energy, the sooner those benefits will be realized. And with some serious reforms, some of this oil can reach the market in much less than a decade.

Gas prices aren’t under the control of any one President. But Americans shouldn’t settle for policies that restrict oil exploration, refining, and production and artificially drive prices higher.

MORE:

High Gas Prices: Obama’s Half-Truths vs. Reality [2]

Obama’s 10 Worst Energy Policies [4]

Quick Hits:

  • More than 40 percent of immigrants—both legal and illegal—who have been in the U.S. for 20 years are on some type of welfare [5], according to a new report.
  • The U.S. Navy rescued 10 people from the Gulf of Oman, where their ship flying the Iranian flag [6] had caught fire. “It’s not uncommon for U.S. Navy ships to rescue mariners in distress whatever their nationality,” says ABC.
  • Democratic Missouri Senator Claire McCaskill called conservative views “outside of the mainstream” and “dangerous” [7] in an attack on her new opponent Todd Akin, the winner of Tuesday’s Republican primary.
  • NASA scientists are “thrilled” with the quality of images the Mars rover Curiosity is sending back, reports [8] the L.A. Times.
  • A new Heritage Legal Memo [9] explains the section of the 1996 welfare reform law that Obama’s Health and Human Services Department has changed—and shows why HHS has no authority to do so.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/08/09/morning-bell-higher-gas-prices-add-to-economic-slump/

URLs in this post:

[1] AAA’s Fuel Gauge Report: http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp

[2] notes: http://www.heritage.org/research/reports/2012/02/gas-prices-5-half-truths-about-rising-gasoline-prices

[3] 10 different ways: http://www.heritage.org/research/reports/2012/05/ten-actions-congress-can-take-to-lower-gas-prices

[4] Obama’s 10 Worst Energy Policies: http://blog.heritage.org/2012/04/11/obamas-ten-worst-energy-policies/

[5] some type of welfare: http://www.washingtontimes.com/news/2012/aug/8/slow-path-to-progress-for-us-immigrants/

[6] flying the Iranian flag: http://news.yahoo.com/u-navy-rescues-10-iranian-ship-fire-233935251--abc-news-politics.html

[7] “outside of the mainstream” and “dangerous”: http://www.breitbart.com/Big-Government/2012/08/08/Claire-McCaskill-says-conservatives-are-dangerous-outside-of-mainstream

[8] reports: http://latimesblogs.latimes.com/lanow/2012/08/images-mars-rover-curiosity-nasa.html

[9] new Heritage Legal Memo: http://blog.heritage.org/2012/08/08/heritage-legal-memo-welfare-reforms-work-requirements-cannot-be-waived/

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