The truth behind $4 gasoline that Big Oil doesn't want you to know

car filling up

xJasonRogersx Flickr

UPDATE:  The Senate just finished voting on a motion to repeal $2 billion of oil subsidies to the biggest oil companies.  A majority of the Senate - 51 Senators from both sides of the aisle - voted to repeal the subsidies.  While 60 votes were needed because of the filibuster, this is still a strong show of support for ending the tax breaks for oil companies that don't need them.  The Wilderness Society supporters sent more than 30,000 messages to their Senators, so you should all pat yourselves on the back.  We'll keep fighting to break free from Big Oil - and thank you for your support!

As gas prices hover near $4 per gallon, politicians of all stripes are taking to the airwaves and campaign trails to spell out their plans to save Americans money at the gas pump.  Unfortunately, many of them are pushing the same bad plans that got us into our oil-dependent crisis, rather than trying to get us out of it.

A common theme has been that we just aren’t drilling enough on American lands.  They argue that if we opened up all of our lands – including iconic places like the Arctic National Wildlife Refuge – we wouldn’t feel so much pain at the pump. 

But the reality is, we have been testing that theory for the last 8 years.  We’re drilling a lot.  We’re drilling more than any other country in the world.  In fact, we’re drilling more than every other country in the world combined. So far, it hasn’t prevented gas prices from spiking in 2008 under President Bush nor in 2011 under President Obama.

What about access for oil and gas drilling?  A common complaint from the oil industry is that they are being “locked out” of places to drill – places like the Arctic Refuge in Alaska or in the Rocky Mountains.  But the problem isn’t where they are “locked out” – it’s where they have already “locked in” permission to drill. Oil companies have already been granted oil and gas leases on more than 38 million federal acres – as much land as in the state of Florida. 

But these leases too often sit idle, despite the high gasoline prices. The latest report from the Energy Information Administration shows that 2 out of every 3 acres leased are INACTIVE!  Next time you hear the industry complaining about the 2 million acre piece of the Arctic National Wildlife Refuge where they cannot drill, ask them about the 26 million federal acres already under lease where they can drill.  They are hoarding an area the size of Kentucky but not doing anything with it!

On top of their Bluegrass-state sized swath of unused leases, the oil and gas industry is also sitting on more than 7,000 unused drilling permits.  Drilling permits are the final approval needed to drill for oil or gas, so once they’ve got one, there is nothing to keep them from drilling.  What’s more, those 7,000 unused permits account for over half of the permits issued to oil and gas companies.

Another question worth asking – why are American refineries exporting precious gasoline even as the price of gasoline is soaring here at home?    For the first time since the 1950s, the U.S. shipped more refined petroleum overseas than we imported – including gasoline.  So rather than selling the gasoline they produce here in the United States, which would increase supply and possibly lower the price we pay at the pump, more and more refineries have been trying to pad their profits by shipping American-made gasoline overseas.

There aren’t many options for quick relief from high prices at the pump. But clearly the sooner we free ourselves from the shackles of oil dependence – foreign and domestic – the sooner we will be free of oil industry profiteering and political pandering.  Doubling our fuel economy, as the Administration is already pursuing, is job #1.  But clearly Congress has the obligation to immediately eliminate the $4 billion in obsolete oil and gas annual tax subsidies and devote the resources instead to renewable energy and alternative-fuel vehicles. 

Oil industry annual profits swell another $200 million for every additional penny we have to pay at the pump.  And they need tax subsidies too?? C’mon!  Stop those subsidies. It’s the least Congress can do on behalf of consumers weary of having the oil industry tip them  upside and shake more money out of their pockets.