OIL PRODUCTION IN ARCTIC REFUGE WOULD DO NOTHING TO REDUCE TODAY'S SKY-HIGH GASOLINE PRICES
 
Joint Economic Committee Analysis of Federal Government Data Shows Drilling in ANWR Would Only Reduce the Price of Gasoline by Pennies per Gallon Starting in 2018

GOP Killed Measures to Bring Down Out of Control Gasoline Prices, Schumer Calls Scheme to Drill in ANWR a Talking Point Not a Plan

Washington D.C. – Today, U.S. Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC) released an analysis showing that opening up the Arctic National Wildlife Reserve (ANWR) for drilling would reduce gas prices by pennies, beginning in 2018.  This number could perhaps even be lower if foreign oil suppliers, like the Organization of Petroleum Exporting Countries (OPEC), cut back output by an equal amount, as it has in the past.  The JEC analysis shows once again that the way to lower gas prices is not drilling in ANWR, but decreasing dependence on oil long-term and increasing foreign production in the short-term. 

Schumer said, “Oil from the Arctic National Wildlife Refuge would reduce consumers’ price per gallon by a few pennies –ten years from now.  Drilling in ANWR isn’t a plan, it’s a talking point.  The bottom line is we have had a White House and a Republican minority that has taken zero proactive steps to reduce our dependence on foreign oil for seven years.  If it wasn’t for this new Democratic Congress that passed a fuel efficiency increase, President Bush would leave the White House with a record he considers spotless, from the perspective of committing no sins against Big Oil or OPEC.”

The full text of the Joint Economic Committee analysis can be found here and the key findings are:
       •        Opening up the Arctic Refuge to drilling could only reduce gas prices by only one to four cents, in 2018. 
       •        The small decrease in price could potentially be even smaller should OPEC respond by decreasing their production by an equal amount – a tactic they have used to prop-up oil prices in the past. 
       •        At capacity, the additional domestic production in the Arctic Refuge would reduce U.S. petroleum imports by two percent. 
       •        At its peak of production, the Arctic Refuge would only make up less than one percent of world’s oil consumption. 
       •        The Energy Information Administration’s May 2008 report confirms the JEC analysis, “ANWR oil production is not projected to have a large impact on world oil prices.”

Sen. Schumer’s Floor Statement on Consumer-First Energy Act from this morning is below:

We know that gas prices, and the high price of oil and all oil products, is the number one issue in America.  Everywhere we go – legion halls, parades, weddings – this is all people bring up.  They demand action.

Today, we in the Democratic majority are stepping up to the plate with two comprehensive bills.  One deals immediately with the issue of gas prices and the oil companies and the speculation in the market; the second deals with changing our tax policies so we encourage alternative fuels.

We are stepping up to the plate because we know the problems that America faces:  $4 a gallon gasoline – that is 267 percent of the level it was when President Bush took office in the year 2001.  And we can’t pass any legislation?

So we want to debate this legislation now.  We have our ideas.  The other side has their ideas.  But we wish to move forward and debate the issue and finally get something done.  And the other side, the minority leader, said to vote “no.”  He is telling the American people that he and his party don’t want to do anything.  They don’t even want to debate it.  That is an incredible statement at a time when America is crying out for action.

The bottom line is we have had a White House; we have had a Republican minority that has taken zero proactive steps to reduce our dependence on foreign oil for seven years.  If it wasn’t for this new Democratic Congress that passed a fuel efficiency increase, President Bush would leave the White House with a record he considers spotless, from the perspective of committing no sins against Big Oil or OPEC.

Well, we’re not afraid on this side to go after Big Oil when they’re not doing the right thing.  We’re not afraid to go after OPEC.  They are a cartel that squeezes us.  We’re not afraid to do some strong, tough things – some in the short run and some in the longer run – that will bring down the all-too-high price of gasoline.

We are hurting as a country.  We’re hurting individually as Americans.  We’re hurting as an economy, as people don’t have the ability to spend on other things.  We’re hurting in our foreign policy as every day we send over $1 billion to people we don’t like such as leaders of Iran and Venezuela and other places.  And we’re hurting as a globe as we continue to send carbon dioxide and other greenhouses gases into the air.  And the other side says, “Do nothing.  Don’t even debate the issue.”

I’ve heard some people talk about some things on that side.  What about ANWR, or Alaskan oil?  That was defeated on a bipartisan basis a while ago.  But we’ll debate ANWR.  Nobody thinks it’s going to do anything for seven years.  I, for one, as well as many others on this side, supported drilling in the east Gulf.  It is beginning to happen because it would produce more oil and gas more quickly and do something about the price.

So we’re not against any domestic oil production or exploration or gas production if it will make some sense.  But you can’t drill your way out of the problem.  If you don’t do conservation, if you don’t do alternative energy, and if you don’t tell the big oil companies they can no longer run energy policy in America, we will not succeed, plain and simple.  We are finally saying that we need to do something.

There are four major provisions in this bill:  one goes after OPEC; one goes after speculation; one that I have helped write, along with the Majority Leader, goes after the windfall profits of oil companies.  They are making record profits.  And we say, “Take some of those record profits and require it be placed into alternative energy.”  When the head of Exxon/Mobil came before the Judiciary Committee a couple of years ago, he said he didn’t believe in alternative energy.  Well, most Americans do.

Unlike my colleagues from the other side of the aisle, we don’t believe Exxon/Mobil should dictate our energy policy.  They’re doing great; but we, the American people, are not.

Do you want immediate production?  Then do something about Saudi Arabia.  They could do something immediately by increasing production by a million or two million barrels of oil a day.  They would pump oil into the system immediately if we could force the Saudis to do it.  Some of us advocate not giving them arms until they do.  And Alaskan oil would take seven years – and, by many estimates, not do much to change the price because it’s so long into the future.  So the other side’s objections are appalling.  I am profoundly surprised that the other side is seeking to block this bill.  I ask my colleagues to support it.
 
Finally, Mr. President, I note that the windfall profits part of this bill is different than the tax that existed during the 1980s.  It says when the level of profitability is very high, and profits have risen significantly above a historical average, take some of that money and require it to be used for alternative energy.  That is not too much to ask of Exxon/Mobil or of Chevron or Texaco.  It will force the oil companies, which are not sacrosanct, to start doing something to help get us out of this mess instead of just profiting from it.

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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