What do you think the government should do about gas prices?

Question

Democrats want to release some oil from the national strategic reserve. Republicans oppose this.

http://news.yahoo.com/s/ap/20080724/ap_on_go_co/congress_energy

Dems also want to encourage oil companies to drill in offshore areas which aren't protected and have not been tapped.

Republicans want to lift the ban on offshore drilling in many areas. Democrats oppose this.

Another option is of course not to take any action, or to encourage the development or alternative fuels.

What do you think is the appropriate action, and why?

Answer 1

Allow drilling in our own country and the Dems should not determine where.  We also need to start building new refineries that are more efficient and actually would be better  for the environment then the antiquated refineries. The government should not stand or impede any industry but encourage as long as it is for the public good and safe to use.

The only thing the government should do is encourage wise use of our natural resources and incentive to develope alternative sources of energy.

Answer 2

give back man`s freedom too drill

Answer 3

Drill more wells, and build more refinery capacity. Even just talking about it has brought the price of oil down.

Alternative energy should also be encouraged, but this is a long term fix. We also need to expand our use of Natural Gas.

Answer 4

First toss a bunch of speculators in jail and put the oil company executives that set the whole thing up in the first place in jail with them. Next jail all the advertising hacks that are creating this AGW fraud with them. Then pass a bill that all new power plants in the US need to be nuclear on the ground and solar or nuclear in space. One generating capacity reaches a sufficient level give tax breaks for practical electric cars. One they start losing market share oil will once again find its own fair price level, but first you need to bust the bubble in a big way where the oil companies feel the pain for cheating the customers.

Answer 5

drill drill drill

Answer 6

LIft all moratoriums on offshore drilling, make it easier to license new nuclear power plants, expand refining capacity, use clean coal technology, develop oil shale, expand natural gas uses, and at the same time work on future possibilities like wind , solar, and alternatve fuels. Basically if you remove the government roadblocks our free market capitalist system will solve the problems much quicker and more efficently than the government every could.

Answer 7

I boggles the mind that there are people out there that prefer oil exploration to be conducted by Nancy Pelosi rather than the experts.  It also boggles the mind that there are fools out there that constantly suggest it will take 10 years to get that oil out.  That is what genius Clinton said 10 years ago about ANWR.  It is a specious argument meant for an ignorant audience.  If you like continued high prices and reliance on foreign oil, keep Nancy as speaker.  We don't need to raid the strategic reserve.  Again that is a specious argument meant for the ignorant that don't understand the issues.

Answer 8

I think that they should encourage alternative fuel sources, and not just corn. At this rate we are going to run out of corn some day.

They should use some of the money that they get from taxes to do that.

We all know they aren't going to do anything.

I think that we shouldn't be drilling from the earth because when we run out we won't know what to do. They need to save some of that. It takes milions of years for fossil fuels.

Answer 9

They should add tax on it so people will change the way they drive and reduce Co2 emiisions

Answer 10

Do whatever it takes to lower inflation. Afterall, inflation affects the price of gasoline.

Answer 11

The Federal Reserve should raise the Federal Funds Target Rate to 4.00%.

Why?   It would bring light sweet crude prices below $85/bbl, possibly to $75/bbl or $65/bbl, and gasoline into the low $2/gn range.

Oil is just the latest money bubble.    Just like housing.     You might see a margin call meltdown much the way you saw a mortgage meltdown, with energy trading firms being wiped out, if the Fed raises the overnight rate.

They won't, of course, raise the rate by 200 bps but if they raised it by 50 bps instead of 25 bps at the next meeting, they'd send oil prices downward noticeably.

This idea that "oil company executives and speculators set this whole thing up" is silly.  

Speculators perform a valuable function in the market.   They enable producers and consumers to hedge their exposure to volatile prices.    Commodity speculators look for arbitrage opportunties - a disconnect between their cost of funds and the future value of the commodity.     When you cut the cost of funds, that opens up more such disconnects.    Speculators take long positions.    This bids the commodity price up.    All of the trading is done on margin but the speculators' margined positions are long and the price keeps increasing so margin is never called.  As the prices go up, and the Fed increases the supply of money and credit to meet the low target rate, the disconnect actually widens, which entices more long positions, which widens the gap as long as the Fed maintains the low rate, etc... - it builds on itself - call it a "positive feedback" if you must.

When the Fed finally raises rates, that pricks the bubble, and the prices start to tumble.  

And there is no such thing as a soft landing.     Fed Chairmen have tried to engineer them but it doesn't work - it's like filling a tire with a hole in it.  At best traders just allocate the liquidity to another asset and you just create another bubble.

We saw this with technology, with housing.......   now we're seeing it with oil.

Oh, the asset was originally undervalued, the supply and demand fundamentals did support a price increase, just like it's a fact that "they aren't making any more land" - the speculators aren't STUPID, they DO pick assets that initially are undervalued.  That's their job - and that increase in the value of the asset in turn influences people to conserve more, which any good environmentalist should want.        

But the Fed factor multiplies the supply-demand factor by up to several orders of magnitude.      The "noise is far louder than the signal," if you must.

So yes, in the long run we need to drill more, increase refining capacity, especially capacity to refine lower grades of crude, which are in abundance (because there's little refining capacity), but that's maybe $30/bbl - - the rest is the Fed's fault.    

And, indirectly, Bush's fault, since it's his wasteful spending that the Fed is enabling with these low rates.

Re: the stragic reserve, that's done based upon the perceived threat to supplies.   Generally when one major source of petroleum or refined product goes off-line, we're back to normal within a few months if not weeks.   Saudi Arabia, obviously that would have a longer and larger effect.   I don't know what the perceived supply threats are, so I don't pretend to know whether oil should be released from the SPR, any more than I know whether the threat level should be red, orange, whatever.

Answer 12

The only thing the government should do is get out of the way!

Lift the bans they have that prevent us from drilling and building refineries.

Any other HELP from them would just mess things up more.

Answer 13

Dana-- I wrote about this in my first blog article "Open Letter to Congress"  --  here:

http://www.neighborsgo.com/index.php?pag...

You can read the rest of the blog here:

http://www.neighborsgo.com/blog/boatman2

Answer 14

i think it needs to be lowered to a reasonable realistic number and closely monitored i dont kno what to say about the consumption maybe hand out birth control and discounts on condoms so we stop over populating  then there wont be too many people using too much stuff

Answer 15

Lift the congressional moratorium on offshore.  Dems also need to remove all the hoops they make companies jump through to drill on public lands (and the limit on leases before they ask for another kickback).

Encourage new nuclear plants.  I agree with a lot of what Boatman posted on his neighborsgo site.

The government is STILL the problem.

Answer 16

Get rid of the taxes on it.

Answer 17

we have all the oil we need right here in the US all we need to do is drill, why is this so hard for people to understand.  new studies have shown that we have more oil in shale right now in the Western states than the entire Russian reserve and more than the Saudis off shore.  if the prices continue to increase then people stop buying cars if people stop buying cars the auto manufacturers have no money to invest in your precious alt. energy solutions and people lose jobs.  this is simple cause and effect, if you don't wake up soon Barry H. Obama is going to not drill and you will not be able to drive to a job you no longer have.  not the kind of change i want.....

Answer 18

lower them

Answer 19

spend heavily on solar power (massive scale) for electricity to power homes.Allow people to insure their most expensive auto or truck but be able to transfer to any other vehicle they own as long as it is priced less (be fair to the gov there ).The money that is saved would allow people to relocate their money to green interest as it suits them win- win

Answer 20

I'm a bit shocked that you are the one to ask this question. About a week ago I got an email from Northwest Airlines about oil speculators with a link to send an email to my state representives. Then on July 18th I got an email reply from Norn Coleman:

Dear Ms. Sundstrom:



Thank you for taking the time to contact me regarding speculation in commodity markets and the most pressing issue facing American families:  the high cost of energy.  These high prices are effectively choking the life out of our economy, and I share your sense of urgency that Congress must take action as soon as possible to address this crisis.



Speculation in the energy commodity markets has increased dramatically, and there is concern that activity in these markets is artificially raising the cost of fuel.  I have been working for years with my colleague Senator Carl Levin (D-MI) on the issue of market manipulation and speculation in the commodity markets.  As chairman and ranking member of the Senate Permanent Subcommittee on Investigations (PSI), our work on the June 2006 PSI report, "The Role of Market Speculation in Rising Oil and Gas Prices: A Need to Put the Cop Back on the Beat," is often cited by experts as a key, early study of the issue.  This bipartisan staff report found that a substantial portion of oil and natural gas trades occurs "off-exchange" on Over-the-Counter, unregulated, electronic markets and through bilateral derivates contracts with broker dealers.  



Following on this report and others, I worked with Senator Levin to close the "Enron Loophole" as part of legislation added to the 2008 Farm Bill, which passed on June 18, 2008.  Subsequently, I and many other Senators have been looking into other areas of the Commodity Exchange Act that could be improved to ensure transparency and prevent excessive speculation and market manipulation.



Most recently, I have cosponsored a bill introduced by Senator Levin, the "Over-The-Counter Speculation Act," S. 3255.   This bill is designed to extend the Commodity Futures Trading Commission's market oversight and surveillance to Over-the-Counter trades that are found to be causing a "major market disturbance," which is defined as any market disturbance in a commodity market that prevents the market from accurately reflecting the forces of supply and demand for a commodity.  Such disturbances would include excessive speculation and market manipulation.  Our bill has been referred to the Senate Agriculture Committee where it awaits further action.



However, the fact is that if we really want to address speculation's effect on energy prices, Congress must act to dramatically boost our domestic energy production and conservation efforts.  We should send the most powerful message we can that the world's largest oil consumer is going to produce more and use less.  Experts agree that if Congress takes bold action to change the supply and demand situation, there will be a near-term decrease in prices.



To produce more and use less, I have introduced the Energy Resource Development Act (S. 3126) and have cosponsored the Gas Price Reduction Act (S. 3022).  I believe it is critical to act boldly to address our energy security crisis in the near term, which is why these bills call for diversifying America's energy portfolio to take advantage of the United States' many domestic fuel resources by opening up portions of the Outer Continental Shelf (OCS) for oil and gas development, fully funding the nation's renewable energy and energy technology programs, developing coal-to-liquid technology, and boosting our nuclear energy production.  I sincerely believe that we can solve the energy crisis we are facing if America takes bold action to utilize the domestic resources at its disposal.



Thank you once again for contacting me.  If I may be of further assistance to you in the future, please do not hesitate to contact me again.



Sincerely,

Norm Coleman

United States Senate

I feel this email from Mr Coleman adaquately describes how I feel on this subject and what I feel needs to be done.

Answer 21

**"Republicans want to lift the ban on offshore drilling in many areas. Democrats oppose this.

Another option is of course not to take any action, or to encourage the development or alternative fuels."**

I think more offshore drilling is necessary, and a good plan.  Anything to get people off the dependance on Middle East oil sources is a good thing for obvious reasons.  Alternate fuels can be looked at, but none exist now and with the exception of electricity none are on the horizon that would function in cars.  The problem with electric cars is that without massive added electrical sources the idea won't flow.  We'd have brown-outs and black-outs all the time from the overloaded grid system that can barely pump out enough power for our current needs.  Can you imagine the problems if we all had electric cars plugged in every night?

Some argue that more nuclear power plants are the answer, and I fully support that.  But if solar, and to a lesser degree wind energy became much less expensive, people would use them much more.  Then there's geothermal energy, where all heat and cooling you could ever want is there for free...and to make people like you happy, there is no carbon from it.  

We both see electrical and fossil energy from current sources as a problem.  But for somewhat different reasons.  Nonetheless, our money is better spen developing some alternatives at home so that we're not sending so much of it to the Arab countries.

Answer 22

Stop regulating production.  Stop restricting drilling on private property.  Lift the freeze on building new refineries.  Stop taxing gas.  Open the market, do nothing, and the prices will return to their natural equilibrium.

Answer 23

If it costs so much, we definitely need to find an alternate, cheaper source. But being the government, they'll probably do what they usually do, nothing.

Answer 24

The sooner we kick our oil habit, the better.  We can drill and release all the oil in the world but it won't matter as we will find ourselves in the same situation over and over again.  We should put everything we have into developing alternative renewable energies.

Honda is already on the ball...meanwhile American car companies are tanking.  We've got to stop being so stubborn and slow to adapt before it's too late.

Answer 25

Releasing the reserves is not a good idea and won't lower the prices anyway.  It's dangerous to empty our reserves when we depend so much on foreign oil.  Besides, it's not allowed to be done that way.  Only in the event of a cutoff in supplies, not to lower prices.  You'd think Pelosi would know that, but then she's by far the dumbest politician in decades.

Dems will only allow drilling in areas that are known to contain no oil.  That's just political posturing.  Unfortunately they really do not want the prices to be lowered.  In fact, they are talking about raising the taxes on gasoline to punish the poor even more. I don't know a more greedy bunch of politicians than the democrats in the senate.

Reps want to lift the bans, which will open the market, thus reducing the prices almost immediately.  Look at what Bush's announcement did to lower the costs already.

We should still continue to look for alternatives, but that may take 10 to 20 more years and we'll always need oil for plastics and clothing, so we'll never replace oil.

There may be some possible alternatives to run automobiles, but does anyone have any alternatives to fuel airplanes?

Drilling will give us oil in perhaps 5 years.  We need new refineries too, so the bans on them should also be lifted.  

Also we should lift the bans on nuclear power, which is by far the cleanest solution to energy needs.

Answer 26

1.  Cut off all fuel sales to CA, WA, and OR.  

2. Demand that all gas powered vehiceles be bared from those states.

3. That would free up billions of gallons of fuel for the normal people

4.  Watch in glea as CA, WA, and OR.  Starve while their products rot in the fields.

5.  Put sharp shooters on the boarder, anyone trying to cross back into REAL America would be shot on sight.

that would fix the problem

Answer 27

Keep them high, then they'll be less cars on the roads!

Answer 28

Actions so far indicate that the politicians are more focused on the election than doing the right thing.  If the public were better informed overall, the politicians wouldn't be able to get away with manipulating our energy policy in this fashion.  

All of what you mention are stop gap, bandaid measures, not fully-realized solutions.

Answer 29

Remove the demand and the price will go down.  We don't even need the oil.

With a 10 year plan energy use per capita could be cut in half.  With a 40 year plan energy use could be cut 90%.  Most of this has to do with buildings, most of the rest is transportation.

According to Mr. Gore, we can be 100% renewable electric in 10 years.  I'd settle for 70% of all energy in 40 years.

After that, the 30% will come from natural gas, "clean coal" and nuclear.

The price of oil would then be irrelevant because it will only be used as a chemical feedstock, not as a fuel.

Building efficiency and retrofit is going to be a big big business with lots of work to be done.  Same goes for retooling transportation.  

The best part is, it's a win for everybody now and in the future.