“In an economy that relies on oil, everybody is effected by the recent rises in gas prices – farmers, truck drivers, restaurants, doctors, lawyers. Businesses feel it in their bottom line and consumers feel the pinch at the pump. For Americans already facing tough times, it’s a new burden,” Obama said at a press conference Friday in Washington.
Today as global demand is increasing, and turmoil in North Africa and the Middle East escalates, gas prices are rising again due to tightened supply.
Obama said, “but rising gas prices are not a new phenomenon. Three years age before the recession hit, a combination of factors including rising demand from China, gas rose to $4 a gallon. Then worldwide recession and a decrease in demand pushed prices back down.”
“The good news is the global community can handle an international decrease in supply like this. Other oil producing communities have agreed to fill any supply gaps. The American government will continue to coordinate with its global partners to minimize any supply disruptions. Should the situation deem it necessary, we are prepared to tap our national stockpile of petroleum reserves,” the president said.
“We are also watching on a Federal level for any signs of manipulation in the financial markets. State Attorney Generals have been authorized to watch out for price gauging or any situation that takes unfair advantage of working families at the gas pump.”
America is better prepared for supply disruptions than we used to be. Today, in 2011, we use 7% less oil than we did in 2005, even though the economy has grown since then. This is partly because our economy is more efficient as a whole.
Auto manufacturers are producing more fuel efficient cars and trucks, some new vehicles get up to 50 mpg. The US govt has demanded high fuel efficiency standards in all new cars and trucks, and auto makers have done a good job providing a supply of fuel- efficient cars that people want to drive. (For information about how your company can increase efficiency and save thousands in gas costs, click here.)
Recently the US passed a payroll tax cut that will help to grow the economy and increase job creation. In the wake of rising gas prices, this should also help to provide a cushion for America’s families. This is part of the commitment to try and get gas prices down.
Tax cuts will average about $1000 for the average working family this year. This is why economist’s like Warren Buffet believe this will encourage job creation in the private sector.
The hard truth is that as long as the US economy depends on foreign oil, we will always be subject to price spikes. We have to get moving on developing an economy with more energy-efficient production and energy conservation. In the short term, we must become more energy efficient; in the long run, we must become more energy independent.
First, right now, we must continue to boost domestic oil and gas production. Last year American oil production reached its highest level in 7 years, since 2003. Oil production in Federal waters in the Gulf of Mexico reached an all-time high. For the first time in more than a decade, imports counted for less than half of what Americans consumed.
We are encouraging responsible off-shore exploration and production. But we also have to keep in mind that we are only a few months removed from the worst oil spill in history. We are trying to do everything to encourage drilling while meeting safety standards and requirements. To date, we’ve approved 35 more off-shore drilling permits with Big Oil companies that meet these new safety standards.
There is also more that we can do. The US oil industry holds leases on tens of millions of acres both offshore and on land. Some of these leases aren’t producing a thing, so the Interior Dept will be determining how many of these leases are under-developed. The report will be complete in 2 weeks (at the end of March, 2011). We will reach out to American oil leaseholders to encourage them to develop the leases they hold, in an effort to spur production in a timely manner.
We are working with industry to explore new methods and areas of production, working with new technology to explore new oil drilling techniques. We are looking at potential development in Alaska, both on-shore and off-shore.
All of these actions are helping to increase domestic oil production in the short and medium term. But domestic oil is not a long term solution.
Even if we drill more tomorrow, oil takes time to come online. Even if we tap every reserve available, we still only control 2% of the world’s oil, but consume over 50% of the world’s oil.’
For information about how your company can save thousands in gas costs, click here.