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I received this correspondence from Senator Collins and Representative Tom Allen when I wrote to them concerning rising oil prices. They are a bit wordy but will give people an idea of what government is doing to fix the current gas price hikes and give a look forward to the future. The greeting name was changed to protect the innocent(me).
Dear Mr Maineah:
Thank you for contacting me to express your concern regarding the high cost of oil. I appreciate your taking the time to do so.
The United States needs an energy policy that meets our nation's growing demands without compromising the health of the environment. In the months and years ahead, we must set a course to make significant changes to our energy infrastructure in order to reduce our dependence on foreign oil, improve our energy efficiency, and implement environmentally sound sources of energy. In fact, I believe we must embark on a national effort to achieve energy independence by 2020.
As you may know, the spike in energy costs is due to many causes: unneeded tax subsidies for oil and gas companies, speculative trading on futures markets, the President's decision to fill the Strategic Petroleum Reserve (SPR), increased global demand for crude oil, instability that threatens supplies from the Middle East, the supply decisions of the Organization of the Petroleum Exporting Countries, and insufficient refining capacity. Paramount among our challenges is our over-reliance on foreign oil, which threatens both our economic and national security. In the months and years ahead, we must set a course to make significant changes to our energy infrastructure in order to achieve energy independence and stabilize gas and oil prices.
With the price of oil reaching record highs and net profits of a single oil company approaching almost $10 billion in a single quarter, it is absurd to expect taxpayers to subsidize the oil and gas industry. You may be interested to know that I offered an amendment to the fiscal year 2009 Budget Resolution that would eliminate tax subsidies to big oil and gas companies and provide tax credits for renewable energy and energy efficiency efforts like transitioning to clean burning wood stoves, cellulosic ethanol production, and purchase of plug-in hybrid vehicles. On March 13, 2008, my amendment was adopted and passed as part of the Senate Budget Resolution.
In addition, on June 6, 2007, I introduced a bill, S. 1554, that also includes provisions to eliminate needless tax credits for oil and gas companies. Eliminating these needless subsidies would allow for increasing tax credits designed to promote energy efficiency and encourage the development of alternative fuels. I believe that we should eliminate these tax loopholes, which, ultimately, are paid for by American taxpayers. Additionally, I voted against an amendment offered to the 2007 Energy Bill that sought to block the elimination of tax loopholes for big oil.
Congress also must pass legislation to help curb speculation on futures markets that can artificially drive up energy prices. On December 11, 2007, I participated in a hearing held by the Senate Homeland Security and Governmental Affairs Committee Permanent Subcommittee on Investigations to examine whether speculation in energy markets has caused, at least in part, the recent spike in energy prices. That is why I supported an amendment to the Senate Farm Bill that requires the government to help monitor and curb speculation on futures markets. Also, on February 12, 2008, I sent a letter to Farm Bill conferees requesting they keep this provision in the final version of the bill.
I have long supported smart management of our nation's Strategic Petroleum Reserve (SPR) to help stabilize oil and gas prices. For example, on January 10, 2007, I sent a letter to the Department of Energy (DOE), the agency that manages the nation's oil reserve, urging it to temporarily suspend filling the SPR. A deferral of DOE's plan to acquire almost 13 million more barrels of oil for the SPR would increase oil supplies to the U.S. market and help decrease record-high oil prices. Cheaper crude oil would lead to cheaper oil and gas prices.
Many Americans face difficult challenges as the cost of energy continues to rise. I support a balanced, bipartisan energy policy that increases our domestic supply of energy and decreases our demand for foreign oil, which will help us to establish energy independence and to stabilize gas and oil prices. As the Senate continues to consider energy legislation in the 110th Congress, I will work to advance these objectives. Again, thank you for contacting me.
Sincerely,
Susan M. Collins
United States Senator
Dear Mr.Maineah:
Thank you for expressing your concern about rising gas prices. I appreciate hearing from you.
Everywhere I go in Maine, people tell me that they are struggling with the high cost of gasoline and heating oil. In November 2006, oil traded at around $58 per barrel; today, it is at
$94 per barrel. Motorists paid $2.30 a gallon for regular gas; today they are lucky to fill their tanks at $3.16 a gallon. At $3.50 or more a gallon, the price of diesel fuel is threatening to put Maine's independent truckers out of business. Often saddled with fixed- price delivery contracts, truckers cannot pass these skyrocketing costs on to their customers. Last winter was relatively mild in Maine, and households could purchase fuel oil for around $2.20 a gallon. This winter, we have not had shirtsleeve temperatures, and heating oil prices are at a staggering $3.14 a gallon.
I believe that the solution to high gas and heating oil prices should include prompt, effective federal action on several fronts.
Since the fall of 2005, when fuel prices exploded after the Gulf Coast hurricanes, I have made this issue a priority. In the House, we are making progress, but before effective remedies become law, the voices of Mainers whose jobs or health are threatened by runaway fuel costs must be heard not only in the House, but also by the Senate and White House.
The House has already approved the Federal Price Gouging Prevention Act (H.R. 1252), which I cosponsored. This legislation would provide the Federal Trade Commission with explicit authority to define price gouging and to investigate and punish those who artificially inflate the price of oil, natural gas, home- heating oil, crude oil, and propane. Current law is weak, both in its failure to define price gouging or to give the FTC the tools to prosecute profiteers at the top of the chain, like Exxon-Mobil.
Stiff new civil penalties would make violators regret ever gouging a single Maine family.
H.R. 1252 passed the House in May, but the bill has been bogged down in the Senate by the allies of Big Oil. This must end; a federal price gouging law is needed now to keep America and Maine working and warm.
The same scenario is unfolding concerning a rollback of the huge tax breaks Congress doled out to Big Oil in the 2005 Bush- Cheney energy bill. These giveaways were a disgrace back then, when I voted against them. With the obscene profits energy companies report today, it is outrageous that American taxpayers are not only paying through the nose for fuel, but as taxpayers, subsidizing the industry. In January, the House repealed these unwarranted tax breaks. In the Senate, however, the friends of Big Oil have filibustered, refusing to allow the House-passed bill to come up.
I am also pushing for two other proposals pending in the House to rein in fuel prices. The first would regulate speculators who are now are driving up energy prices through off-market trading. The Commodity Futures Trading Commission (CFTC) oversees only about 25 to 35 percent of all energy commodities trading; the rest of energy speculation occurs without any public oversight. H.R. 4066, the Close the Enron Loophole Act, would require these market manipulators to abide by the same rules that already govern on-market traders. Transparency and increased oversight by the CFTC will instill confidence in the market, help eliminate unnecessary crude oil price inflation, and give American families a break at the pump.
Finally, I am fighting for my Small Business Fuel Cost Relief Act, H.R. 2133. This bill would create a tax credit for eligible businesses for any amount they spend on fuel (including gasoline, diesel, natural gas, and heating oil) over the price on Labor Day 2004, adjusted for inflation. In New England, gasoline now is about $3.16 at the pump. Last year, the price was $2.30; back on Labor Day 2004, it averaged $1.94. My bill also would raise the IRS Standard Mileage Rate to 60 cents for business owners who use their vehicles for business purposes. These changes would provide our small businesses the reprieve they need to survive.
Spikes in fuel prices inflate the cost of almost every product and service purchased by families and businesses.
Congress must act soon to provide consumers relief from sky-high fuel prices. Please be assured that I will continue to work for common sense energy policies that achieve these goals.
Again, thank you for contacting me. Please feel free to do
so again on issues important to you.
Sincerely,
Tom Allen
Member of Congress
Representative Allen's form letter needs a little updating as oil is about $10.00/bbl higher than what he states.
I did not hear back from Senator Snowe but I guess it's not an election year for her.
Those were very well put letters, and it's good to see someone stepping up to ask our government about it.
I don't see where they mentioned two very large problems concerning the rising gas prices, though. People forget these two things because no one really talks about it. Why, I'll never know. But they are:
#1 The value of the dollar. A barrel of oil doesn't really cost $107. It still costs about $85, but because the value of the dollar has plumetted, $85 American dollars isn't worth $85, it's worth maybe $70. We need to do more than just lower our gas prices - we need to get our economy as a whole back on its feet.
#2 Government taxes imposed on each gallon of gas. I admit I don't know the exact figure, does anyone care to jump in? But I believe it's somewhere around .40 - .50 per gallon of gas.
So while they plan to fix two problems which, I do agree are problems, no one makes mention of the two reasons that may be even bigger.
One of the tricks and problems for that matter is not addressed by the above pols. The Treasury, through the Federal Reserve has put a lot of dollars out there in the markets and reduced interest rates to free up credit. The tremendous amount of cash on the market has resulted in devaluation of the Dollar. The price per barrel of oil is pegged to OUR currency.
My theory is that it costs more in dollars to buy the oil, because of inflation brought on by devaluation. Oil should cost no more than $70-$80/bbl right now. The rapid devaluation has driven it up over $100.
One of the tricks and problems for that matter is not addressed by the above pols. The Treasury, through the Federal Reserve has put a lot of dollars out there in the markets and reduced interest rates to free up credit. The tremendous amount of cash on the market has resulted in devaluation of the Dollar. The price per barrel of oil is pegged to OUR currency.
My theory is that it costs more in dollars to buy the oil, because of inflation brought on by devaluation. Oil should cost no more than $70-$80/bbl right now. The rapid devaluation has driven it up over $100.
You won't get an argument from me on that statement though Senator Collins letter sounds a bit like his don't you agree?
Rush Limbaugh and Hillary Clinton can say the same thing. Hillary will get criticized for it and everyone will somehow magically forget that Rush even mentioned it
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