Republican Budget Would Also Decimate Investments In Clean Energy, Making America More Reliant On Oil From Unstable Regions Of The World

Democrats Release New Web Video Compilation Of Independent Experts Explaining How Excessive Speculation Is Driving Up Prices At The Pump

Washington, DC – With consumers feeling the pinch of rising gas prices, forty-eight Senate Democrats sent a letter to Senate Minority Leader Mitch McConnell and House Speaker John Boehner today calling on Republicans to abandon a proposal that would make excessive speculation in the oil markets even worse.

Republicans’ reckless spending bill, H.R. 1, would reduce funding for the Commodity Futures Trading Commission (CFTC) by one-third, forcing layoffs to the watchdog agency that polices market manipulation that drives up oil prices.

Experts say that with demand fairly stable and supply at an all-time high, speculation is a factor driving up gas prices. One expert said speculation may add as much as $1.50 a gallon to the price consumers pay at the pump for gasoline.

***Click here to watch commodities experts explain how Republicans’ dangerous plan could leave excessive speculation unchecked.***

“At a time when gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities,” Democrats wrote. “We stand ready to work with you to come to a responsible budget compromise that will not do anything to make our gas price problem worse, or undermine the progress we are making in developing the clean energy technologies we need so we can better compete with countries like China.”

Republicans’ reckless spending bill would also cut billions from development of alternative fuels and clean energy technology, which would set back efforts to stay competitive with growing nations such as China while simultaneously putting America’s independence from foreign oil even further out of reach. During this period of unrest in the Middle East, freeing ourselves from our reliance on foreign oil is more important now than ever before.

“This is a bad idea that has to go,” Senator Murray said. “At a time of skyrocketing gas prices, cutting support for the very agency charged with protecting consumers from excessive oil speculation on Wall Street is a recipe for higher prices at the pump and less economic security. There are responsible cuts, and then there are cuts like this one, which target consumers at a time when they can least afford it.”

The senators urged McConnell and Boehner to work with Democrats to negotiate a responsible budget that makes smart cuts that don’t undermine our transition to a safe, clean and affordable energy future.

The senators’ letter is below:

Dear Minority Leader McConnell:

As we work toward a long-term budget compromise to keep the government running through this year, we urge you to abandon the reckless energy proposals in the House-passed Continuing Resolution (H.R 1) that will condemn our country to continued reliance on foreign oil and allow market manipulation that could lead to gas prices rising unchecked.

As you know, H.R. 1 would reduce funding for the Commodity Futures Trading Commission (CFTC) by one-third.  The CFTC serves as an important “cop on the beat,” working to protect American consumers by cracking down on manipulation and other market abuses that can drive up oil prices.  Yet your spending plan would shrink the CFTC budget back to 2008 levels, when Americans were blindsided by both record high gas prices and a financial crisis that cost us millions of jobs. According to CFTC Chairman Gary Gensler, these cuts would cause “significant curtailment of staff and resources.”  At a time where gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities.

We find it equally troubling that your preferred budget would cut billions of dollars in investments in critical programs focused on developing new alternative fuels and clean energy technologies, undermining our competitiveness and increasing our trade deficit with oil producing nations.  We urge you to reverse these policies that will only set our nation backward, and put America’s independence from foreign oil even further out of reach.

We stand ready to work with you to come to a responsible budget compromise that will not do anything to make our gas price problem worse, or undermine the progress we are making in developing the clean energy technologies we need so we can better compete with countries like China.  Together, we can craft a sensible fiscal policy that invests in what we need to grow and cuts what doesn’t, without undermining our mission to transition to a safe, clean and affordable energy future.

Sincerely,

Senator Harry Reid

Senator Dick Durbin

Senator Chuck Schumer

Senator Patty Murray

Senator Debbie Stabenow

Senator Kent Conrad

Senator Maria Cantwell

Senator Bill Nelson

Senator Max Baucus

Senator Barbara Mikulski

Senator Jeanne Shaheen

Senator Jeff Merkley

Senator Mark Begich

Senator Dianne Feinstein

Senator Mark Pryor

Senator Richard Blumenthal

Senator Mark Udall

Senator Kay Hagan

Senator Ben Cardin

Senator Al Franken

Senator Barbara Boxer

Senator Frank Lautenberg

Senator Jack Reed

Senator Carl Levin

Senator Mark Warner

Senator Tom Carper

Senator Daniel Akaka

Senator Tom Harkin

Senator Bob Menendez

Senator Ron Wyden

Senator Claire McCaskill

Senator Chris Coons

Senator Michael Bennet

Senator Sherrod Brown

Senator Jon Tester

Senator Amy Klobuchar

Senator Sheldon Whitehouse

Senator Bob Casey

Senator John Kerry

Senator Jay Rockefeller

Senator Jeff Bingaman

Senator Daniel Inouye

Senator Joe Lieberman

Senator Bernie Sanders

Senator Patrick Leahy

Senator Herb Kohl

Senator Tim Johnson

Senator Tom Udall

Cc: Speaker John Boehner

Myth: Domestic oil production is down in the United States under President Obama.

Fact: U.S. oil production, including that on federal lands and waters,  has been increasing since 2008, with its largest single-year increase in decades in 2009.  U.S. oil production is forecast to continue to increase through 2035.  And the U.S. oil industry has access to more than 60 million acres of federal land and water that they have not taken action to put into production.  [Bureau of Land Management and Energy Information Administration (EIA)]

Myth: Last fall’s moratorium on drilling new deepwater wells in the Gulf  reduced U.S. oil supply and is driving up gas prices.

Fact: Oil production in the U.S. Gulf of Mexico continued unabated throughout the Deepwater Horizon disaster, even while oil was spilling into the Gulf.   The moratorium – which was lifted in October 2010 — affected only the initiation of new deepwater drilling activity and had no application to existing producing wells.  Despite the Deepwater Horizon disaster, oil production in the Gulf of Mexico increased in 2009 and 2010 after falling since 2004.  Meanwhile, gas prices have increased over the last month, at the same time as domestic oil production has increased.  [EIA]

Myth: We can reduce oil prices if we just “drill baby drill” domestically.

Fact: More drilling is not a solution to high oil prices.  While U.S. oil production has dramatically increased in the last two years, oil prices have increased  as well.  In its 2007 Annual Energy Outlook, the Energy Information Administration analyzed the impacts of lifting drilling moratoria on the Atlantic, Pacific, and eastern Gulf coasts and found that: “The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”  [EIA]

Myth: The Republican “all of the above” energy strategy will reduce consumption and make us less dependent on foreign oil.

Fact: A true “all of the above” strategy would require focus on transportation efficiency and alternatives, which have proven track records of reducing our oil consumption.  Increased domestic drilling will not end the addiction to oil which compromises our economic and national security.  With less than 1.5% of the world’s oil reserves, the only way to reduce long term dependence on oil is by investing in a clean energy economy.   The Energy Independence and Security Act of 2007, which improved vehicle efficiency and increased our use of biofuels, will save more oil between now and 2030 than the U.S. currently has in oil reserves.  The Republican spending bill cuts funding for Energy Efficiency and Renewable Energy by more than $700 million.  It also slashes the Department of Energy’s loan guarantee program for clean energy developers and manufacturing companies designed to bring clean energy technologies to commercial scale use.  [NYTimes 02/14/11, Forbes 03/03/11]

Myth: The EPA’s regulation of oil refineries and the President’s Cap & Trade policy is to blame for higher gas prices.

Fact: 18 percent of U.S. oil refinery capacity currently sits idle, the highest idle capacity rate in over a decade; clearly, we do not have a problem with lack of refinery capacity.   EPA’s current Clean Air Act standards for vehicles are projected to save consumers money at the pump — $130 – $160 per year – and save 1.8 billion barrels of oil.  And, of course, the cap and trade proposal never became law.  To blame that policy proposal for gasoline price increases is yet another example of a cynical attempt to gain political points rather than address our fundamental addiction to oil.  [EIA and EPA]