The strain of high energy prices

Friday, August 19, 2011

A recent Wall Street Journal/NBC News poll found 69% of respondents said they had been affected "a great deal" or "quite a bit" by the increase in gas prices this year. Average gas prices have recently fallen, but they remain 90 cents higher per gallon than a year ago. These higher costs continue to strain families, farmers, ranchers, small businesses, and seniors across the Third District of Nebraska.

Historically, Americans have spent about 8% of their overall retail purchases on gasoline. Earlier this year that average hit 11% - meaning out of every dollar spent on retail purchases 11 cents went to gas stations. Not only is this figure 38 percent higher than average, it is the highest since September 2008.

Rising energy costs not only increases the price of gas, but also the costs of food, heat, commodities, and other goods and services. Many businesses are forced to increase prices for their customers to offset elevated transportation costs. Even worse, the more businesses spend filling up their gas tanks, the fewer jobs they are able to create. Further, expensive energy prices disproportionately affect rural areas like the Third District. For example, farmers and ranchers spend an average of 58% more on energy as a percentage of income than their urban counterparts.

Until a comprehensive energy policy is created to address the soaring costs of energy, we risk a prolonged economic downturn. For too long American energy policy has focused on limiting energy production within our borders and making it more expensive. The current Administration has burdened domestic energy producers with irresponsible regulations and inaction instead of working with Congress to develop policies which utilizes the abundant resources our country possesses.

On Aug. 12, responsible American energy development received an important victory from a federal judge in Wyoming. Chief U.S. District Judge Nancy Freudenthal struck down detrimental energy policies the Department of the Interior and U.S. Forest Service issued in 2010. The Department of the Interior attempted to circumvent the legislative process by substantially changing the permitting process established in the Energy Policy Act of 2005, which was passed by Congress on a bipartisan basis to combat the growing energy crisis. While this decision may seem small, it is a critical, common-sense step on the path toward more domestic energy production.

A strategic, all-of-the-above approach to energy policy, which utilizes American engineering, ingenuity and entrepreneurship, will strengthen our economy and create thousands of new jobs, right here at home. More importantly, by encouraging responsible use of existing American resources, cost burdens on Nebraskans will be lessened.

For more information about energy issues, the latest developments in Congress, or to sign up for my e-mail newsletter, please visit my website at

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  • Representative Smith;

    Oil is traded on a world market, and the United States does not have enough petroleum to increase the global supply, which would reduce demand - and thus the price - for fuel.

    When demand cuts back, the production cuts back and the prices fall.

    If the nation took an extremely vigorous stance on oil exploitation - and relaxed restrictions on the Gulf and drilled in the Arctic National Wildlife Refuge in Alaska and off the coast of California, where America's most easily accessible offshore oil is located - it still would not have much of an impact.

    Your statement that it would create thousands of jobs is probably correct. Although I think there would be far greater job creation if the oil and gas industry put people to work cleaning up their existing toxic waste sites. Didn't last years legislation include Environmental Remediation Cost Expensing?

    Shouldn't we require the oil and gas industry to take care of past environmental remediation obligations before they are allowed to create additional ones?

    If you really want to spur economic growth and create jobs there is one easy step that can be implemented to reach this objective. Any company that participates in a Repatriation Tax Holiday ($700 billion now in the works) should be required to apply any savings from reduced tax rates towards their environmental remediation obligations. With the existing expensing allowances these companies could recoup a large portion of these funds while creating jobs and providing our citizens with a safer/cleaner environment. A win-win for everyone.

    -- Posted by Geezer on Sun, Aug 21, 2011, at 7:33 AM
  • Representative Smith;

    A couple additional comments for you to consider.

    Your article references the rise in gasoline costs compared to the September 2008 level which was above $4.00 per gallon. Recent legislation introduced on June 15, 2011 by Senator Bernie Sanders addresses excessive oil speculation which now has been proven to be a factor in the 2008 gasoline price - S.1200 End Excessive Oil Speculation Now Act of 2011 -.

    Of course, being a Representative of Congress you should have already known this. Additional information has now come to light via a report by the U.S. Commodty Futures Trading Commission (CFTC).

    "This report clearly shows that in the summer of 2008 when gas prices spiked to more than $4 a gallon, Goldman Sachs, Morgan Stanley, and other speculators on Wall Street dominated the crude oil futures market causing tremendous damage to the entire economy," Sanders said. The CFTC has kept this information hidden from the American public for nearly three years.

    Maybe you would be so kind as to provide the facts and data to support your claim that additional domestic oil development will lower the price of gasoline. Of course this may put the skids to any further campaign contributions by Koch Industries - they are listed as one of the top 20 contributors in 2011.

    -- Posted by Geezer on Mon, Aug 22, 2011, at 7:57 AM
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