Gas Price Reduction Plan Revealed

In an attempt at a bipartisan solution to high gas prices, Senate Republicans Thursday unveiled The Gas Price Reduction Act (GPRA) of 2008, which would simultaneously open the way for production of more domestic oil and reduce energy consumption overall.

As gas prices creep toward $5/gallon in most states, Democrats have nixed tapping into America’s domestic oil reserves via offshore drilling and other accessible methods.

The GPRA considers environmental concerns by excluding the option to drill in the Alaskan National Wildlife Refuge (ANWR) — also opposed by Republican presidential candidate Sen. John McCain — and instead proposes what Senate Minority Leader Mitch McConnell (R-Ky) called a “narrowly targeted proposal…to reach out to our Democrat friends.”

The four-step plan to “find more, use less” includes the promotion of offshore drilling, oil shale exploration, utilizing plug-in electric vehicles and improving the Commodities Futures Trading Commission (CFTC) with increased funding, staff and regulation.

“This is not a partisan check-box exercise…[but] an actual accomplishment,” said McConnell, who later noted the plan actually proposes reducing oil demand by 4 million barrels a day.

The GPRA, co-sponsored by 42 Republican Senators who loudly pushed for support at a Capitol Hill press conference yesterday, allows leeway for a solutions compromise by Democrats. Republican Conference Chairman Sen. Lamar Alexander said he hopes for a “good, old-fashioned Senate debate” where Democrats present their own good ideas and join Republicans in finding more domestic oil instead of solely using less.

The Democrats’ tendency to ignore Republican support of renewable resources and reducing carbon footprints hedges with the GPRA, which purports significantly decreasing consumption as equally important as domestic oil production in the battle to lower gas prices in the long run.

One component of the Act, according to a press summary, advocates for better batteries, increased R&D for advanced batteries, Direct Loans for advanced battery manufacturing facilities and a Sense of Senate that the Federal Government should increase its purchases of plug-in electric cars and trucks.

With certifiably hundreds of billions of barrels of oil sitting tight on American coastlines and within the oil shale of Colorado, Utah and Wyoming, the Act would gratify the national interest to reduce dependence on foreign oil. By tapping into oil shale resources — currently banned due to a federal moratorium — America could produce more than three times the oil reserves of Saudi Arabia.

Sen. Bob Bennett (R-Ut) highlighted a pilot project with oil shale in his state – allowed only because the shale is located on state land and is not under the jurisdiction of the federal government.

“[The oil] is there for the taking — we need to take it,” Bennett said.

Alexander said speculation could also be driving up oil prices and hopes the Act will make it easier for Democrats to say “yes, we can” to real action for long term stability in the energy crisis.

Deep sea exploration in the form of offshore drilling – another main component of the Act — could yield up to 14 billion barrels on the Atlantic and Pacific coasts. The GPRA proposes federalizing regulation on offshore drilling, allowing states to decide if they want to pursue it. Such drilling must be at least 50 miles from the coast and states would receive a 37.5% revenue sharing profit as well.

Louisiana residents have seen first hand the benefits grounded in environmentally friendly methods that come from the drilling option. Sen. David Vitter (R-La.) said it’s been done in the gulf “for decades” but the current moratorium on drilling means “85% of our offshore resources are off the table.”

Vitter emphasized the “powerful incentive and reward” from the revenue shares and said there was “no silver bullet” to fix gas prices but this is a step in the right direction.

As the senators took turns speaking for GPRA, Sen. Pete Domenici (R-NM) made one of the most powerful cases. After 36 years in government, he said he has “never felt so frightened about America’s economic future” and warned of America’s destruction if dependence of foreign oil continued.

Domenici urged the Senate to stall their August recess until the Act hits the floor for a vote and said that “passing the GPRA will send a strong message to the world’s oil markets and the unfriendly nations that we buy oil from that America has had enough.”

A diminished dependence on other oil-rich nations will also help increase the integrity of our markets, according to Sen. Saxby Chambliss, who also noted the “impact of spectators on commodity.”

Chambliss stressed the importance of increased staff for CFTC so that they have the ability to moderate and regulate effectively.

The Senators agree with McCain’s idea for a new generation of nuclear power plants, as well as converting coal to liquids for the military.

This is the first Act of its kind to materialize from Capitol Hill since gas prices skyrocketed the past year. It is yet to be seen if Democrats will compromise their position on drilling and sign on.