Across the nation, gas prices have shot over $4 per gallon, and there appears to be no ceiling in sight. The economic shock continues to appear across the broad spectrum, raising retail prices on any goods coming to market, while wages cannot keep pace. As the buying power of Americans continues to erode, will Congress finally act to broaden supplies?
The average price of regular gas crept up to $4 a gallon for the first time over the weekend, passing the once-unthinkable milestone just in time for the peak summer travel season.
Prices at the pump are expected to keep climbing, especially after last week’s furious surge in oil prices, which neared $140 a barrel in a record-shattering rally Friday.
While Americans who have to drive will feel the biggest squeeze, the increased prices also translate into higher costs for consumers and businesses, who will be forced to shoulder increased costs for food and anything else that needs to be transported.
“I don’t think we’ve felt quite the full impact of $138 or $139 a barrel oil,” said Jason Toews, co-founder of fuel price research site GasBuddy.com.
Gas prices rolled past their latest threshold Sunday, increasing to $4.005 a gallon overnight from $3.988 the day before, according to AAA and the Oil Price Information Service.
Congress has put a tight hold on drilling and refining in the US for decades, and this is the inevitable result. The US sits on billions of barrels of oil within the continental shelves, billions more on the interior, and billions in ANWR. Yet we insist on going cap in hand to the Saudis for higher production rather than take some responsibility for our own energy needs, preferring to keep our landscapes while we demand that others exploit their own resources for our benefit.
We could shift some of our reliance on petroleum to nuclear power, on which Europe and Japan largely rely for their electricity. However, Congress under both parties has shown even less courage in standing up to the environmentalists on nuclear power than they have in domestic drilling. The coal industry could produce massive new sources for energy if they were less hamstrung. Yet Congress continues to look for unproven solutions while ignoring the workable solutions in front of them, and their dithering has produced an inflationary environment that resembles the 1970s.
Last week, Barbara Boxer tried to push through the Lieberman-Warner bill, claiming that it would address gas prices. It certainly would — by driving them much higher through over-regulation of the energy industry. The energy industry does not need further regulation. They need Congress to get the federal government out of its way so that it can add more supply to the market, which is the only way prices will fall.
We have asked for expanded nuclear power and domestic drilling for at least two decades. Every time the subject comes up, we get reminded that these solutions take seven years to have an effect. If we had acted seven years ago in the aftermath of 9/11, when it became clear that energy would involve national-security issues, the benefits would have started to arrive right about now — and oil speculation would have never climbed to its current state.
Drill here, drill now, and at least we can expect to pay less in a few years. In the meantime, let’s get started with nuclear and coal while researching as many possibilities for renewables as possible.
Update: NBC’s Today Show asks its two experts, Jim Cramer and Erin Burnett, about the solution, and both agree:
Cramer is exactly on point here. We need to be less selfish and start producing as much of our own oil as possible.
Update II: Jazz Shaw has a moderately dissenting opinion, and a must-read, at The Moderate Voice.
Update III: It was the Today show on NBC, not CNN. Must have had CNN on the brain today. I blame it on the Southern California air. Thanks to the readers who e-mailed me the correction.