From the terrapass blog:
You may recall that earlier this summer we asked TerraPass newsletter subscribers and their friends to join a petition against the “gas tax holiday” proposed by Senators McCain and Clinton. The holiday never came to pass, good news for both the federal agencies supported by the revenue from the tax and for the environment, given that now is pretty much exactly the wrong time to offer incentives that lead to more driving.
This week [July 14] I received an email from Senator McCain’s office, presumably in response to the various times I went up to his website to upload our petition and signatories (over 3,000 people signed on by Memorial Day weekend). It’s a form letter response, which I’ve included below. Much of it I disagree with, starting of course with his campaign’s ongoing defense of the gas tax holiday, and continuing through the suggestion that the solution to our energy woes is to drill for more oil.
See below for the letter with a few smart-alec comments from me.
Dear Mr. Blachford:
Thank you for contacting me regarding the high price of gasoline and our nation’s oil reserves. I understand and share your concerns about the hardships that increasing energy costs are placing on consumers and all sectors of the economy.
Given the multiple factors contributing to high gasoline prices, I do not believe that there is a “quick fix” to effectively reverse the current trend. The key determinants of gasoline price are crude oil price, supply availability, refining capacity, and demand. Increasing supply or reducing demand are the only means of reducing crude oil prices over the long-term.
However, to provide even a small amount of relief during the summer months, I proposed spending the federal gas tax from Memorial Day until Labor Day. This gas tax “holiday” would have reduced prices for unleaded gas by 18 cents a gallon and 24 cents for a gallon of diesel fuel over the summer months when gas prices are historically at their highest. Unfortunately, the majority party was not willing to allow this proposal to receive a vote, despite the fact that gas prices continue to climb.
Given that quantity demanded rises with price decreases and short run elasticity is low, prices would have fallen by much less than 18 cents per gallon.
For the immediate future, we must break with the energy policies of the past and assure affordable fuel for America. This will require more domestic production, especially in the Outer Continental Shelf (OCS). As you may know, a board federal moratorium stands in the way of energy exploration and production of another 18 billion barrels of oil from the OCS. It is time for the federal government to lift these restrictions and put more of our own reserves to use, provided that such development is supported by local stakeholders and costal state governments and adhere to sensible standards of environmental protection.
Some believe that the U.S. should also pursue drilling in the Arctic National Wildlife Refuge (ANWR), a controversial approach that’s promoted as a means of increasing supply and reducing our demand for foreign oil. There are several reasons that cause me to oppose ANWR development at this time. First, even the most reliable estimates conclude that the refuge could only meet about 2 to 5 percent of the nation’s oil needs at best. Additionally, most scientific analyses conclude that ANWR’s land and wildlife, which support approximately 270 different types of mammals, birds, and fresh water fish, would be impacted adversely by development.
Two questions, both of which I'm too lazy to do the research: (1) how does 18 billion barrels from the OCS compare to 2 to 5 percent from ANWR? and (2) how does the passive use value of protection of ANWR resources compare to those of the OCS?
Other actions, such as investing in transportation infrastructure that runs on better, more efficient forms of renewable, non-polluting fuels sources would substantially decrease our nation’s dependence on foreign oil and reduce greenhouse gas emissions, and we should aggressively pursue them. I believe it’s possible to maintain a balance to ensure adequate energy supplies meet the growing demand of the American people.
Finally, reform of the oil futures market is necessary. We must purge the market of the reckless speculation, unrelated to any kind of productive commerce that has inflated the price of gasoline — at the expense of working men and women across our country. With new regulations, we can better ensure integrity in oil-futures trading and protect the public interest.
Gosh. Haven't I (gained and) lost more money as a result of reckless stock market speculation relative to reckless oil market speculation? Could we clamp down on regulation in all speculative markets? Including housing?
Again, thank you for sharing your views with me. Please do not hesitate to contact me in the future on issues of concern
Sincerely,
John McCain
United States Senator
