Truman National Security Project

For years, politicians have offered us the tired and flawed plan of allowing more oil and gas leases across our nation’s parks and wildernesses in order to ‘enhance’ our energy independence. Aside from the incalculable environmental damage this proposal holds, it also defies recent history. President Obama has embraced a number of policies that collectively encompass an “all of the above” approach that also represents common sense and vision that his opponent in this campaign has not yet demonstrated.

Today we have enough data to conclude that allowing additional drilling and production as the sole answer to high gasoline prices will not work nor will it benefit anyone that doesn’t own either an oil company or a refinery. Gov. Romney can certainly afford to purchase a refinery, but for the rest of us more fuel choices besides gasoline, higher efficiency standards for our gasoline-powered vehicles and robust funding to support research and development represent an indispensable portion of the comprehensive “all of the above” energy policy embraced by President Obama that will have the desired result of actually protecting us from pain at the pump and enhancing our energy security.

The proof exists today.  If Gov. Romney’s energy proposals were grounded in reality then gasoline prices would already be falling instead of skyrocketing.  US domestic oil production has grown by 720,000 barrels per day since 2008. However, despite producing more oil than it has in years the price of gasoline is up more than 13 percent this year at about $3.85 per gallon.  Demand for gasoline hasn’t picked up though, and the average vehicle miles traveled for many Americans has actually declined in the past four years. Total US oil consumption remains at less than 19 million barrels per day, which is actually less than the US consumed per day in 2008.  Finally, net oil imports are at a 20-year low from a peak in 2005.

In short; just because oil is pumped from US soil doesn’t mean it goes to US consumers. Oil markets are global, not local.  Gasoline prices have steadily risen all year, even when the price of oil in the US dropped below $80 this past summer. Crude oil is traded on several important price benchmarks including the US West Texas Intermediate (WTI) and the Brent indices. Thanks to tight oil formations and hydraulic fracturing in the Midwest, the price difference between these two indices has very recently grown to more than $20.  That means that WTI-priced oil trades at a more than $20 discount to global price benchmarks. You won’t hear any complaints by oil companies or US refineries in the Midwest; however, because they are reaping historic profits from the discounted index prices.  In addition to billions in tax breaks just to keep working in their lucrative field of choice; they are also able to purchase crude oil at WTI prices and then sell refined petroleum products at global energy prices.

Bringing down oil prices does not mean only drilling for more oil, which hasn’t had much, if any, effect on rising gasoline prices.  The Obama Administration has taken important steps in each of these areas with policies that will ultimately have a far greater impact than the Romney plan of simply permitting more oil and gas leases.  Improving fuel efficiency for new automobile fleets and offering new technology options for automotive owners will dramatically reduce the prices Americans pay for gasoline simply because they will be buying less of it and less often.  Finally, investing in alternative technologies over long periods of time is true preparation for a future where we are not dependent upon environmentally harmful fossil fuels.

Policies supported by the Obama Administration; including the gradual doubling of Corporate Average Fuel Economy standards (CAFE), standing up new technological choices like electric vehicles and natural gas vehicles, and investing in research and development represents a better fuel savings as well. The EIA estimates that improving CAFE standards alone could reduce US oil consumption by 8 percent by 2035.  Biofuels can reduce oil consumption by about 4 percent assuming current consumption levels and that no new fuel sources are brought online, an unlikely outcome if research budgets are sustained.

The right energy path forward is already being blazed by President Obama, not Gov. Romney. The choice is clear.

Rob Rains is a Truman Member.