After a summer that’s been relatively easy on the wallet, gas prices are marching higher again.
The Lundberg Survey finds the national average for a gallon of gas at $3.69, an increase of 36 cents since July 1. With the political conventions now less than two weeks away, voters are asking what the candidates are pledging to do to keep gas prices from spiking again and slowing down the economic recovery.
“Let’s produce more oil and gas," President Obama said, “but let’s also produce more bio fuels. Let’s produce more efficient cars.”
The president likes to call his energy policy an “all of the above” strategy. He includes conventional fuels – oil, natural gas and coal (though critics believe this White House is hostile to the coal industry). But the heaviest emphasis is on developing alternative energy sources, like solar, wind and bio fuels, plus a heavy dose of government-mandated fuel efficiency standards.
The environmental lobby gives the plan two thumbs up.
“We need to keep our eye on the prize, the big energy picture,” Bob Deans of the Natural Resources Defense Council’s Action Fund said. “We are just not going to be able to power a 21st century economy with a 20th century energy system.”
The push to develop alternative energies has led to some spectacular flops and failures – all with tax dollars on the line. The administration touted a $535 million loan to the solar company Solyndra, which promptly went bankrupt, and it offered generous tax breaks to consumers to buy the battery-powered Chevy Volt, which has yet to catch on.
John Felmy of the American Petroleum Institute, an industry group, says the administration shouldn’t be picking winners and losers with taxpayer money.
“Because we don’t know what technologies will survive,” Felmy told Fox News. “The key thing is that the federal government should be spending money on basic research, not commercial development.”
That point is a key plank in Mitt Romney’s energy plan. He would limit taxpayer handouts to basic research – to be shared around the industry. First, though, Romney wants to find more conventional sources of energy.
“What I would do as president is take advantage of the energy resources we have and we can find," he said at a rally in Colorado. "I am going to open lands for exploration.”
Romney would open up more of the Outer Continental Shelf to development, including areas Obama put off limits after the BP oil spill. That would include the East Coast, as well as portions of the Gulf of Mexico. Romney would also like to open up parts of the West Coast and Alaska to drilling, including the Arctic National Wildlife Refuge. And he has vowed to build the Keystone pipeline "if I have to myself.”
Felmy said the boom in energy could be significant.
“There is a vast amount of oil on federal lands that we can develop, over 100 billion barrels. If we were to produce that amount of oil over 30 years, it would be 10 million barrels a day, or what we import in oil,” he said.
As part of his plan, Romney would also streamline federal regulation the industry complains is standing in the way of efficient development. Not surprisingly, the environmental lobby gives Romney’s plan a thumbs-down.
“We certainly don’t think the Outer Continental Shelf, the Atlantic Ocean, ought to be exposed to the same kind of environmental degradation we saw in the Gulf of Mexico two years ago," Deans said.
Conventional wisdom is that there is very little a president can do, other than releasing oil from the Strategic Petroleum Reservem to bring down gas prices. But even the promise of more supply can have downward pressure on the price at the pump.
That’s what happened in July 2008, when President Bush and Congress reached an agreement to open the eastern Outer Continental Shelf to development. Record-high oil prices dropped $9 a barrel literally overnight.
The industry insists Romney’s plan could have a positive impact on many aspects of the economy.
“If we produce more oil in this country, we generate jobs, revenue for the federal government and energy security,” Felmy said. "So it is a win, win, win, irrespective of the price debate.”