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Democrats' Response to the Energy Crisis

Key Topics:
 - Reducing Demand
 - Increasing Supply
 - Combating Market Manipulation
 - Opposition to Drilling in Environmentally Sensitive Areas

The Democratic response to the energy crisis has been threefold: to reduce demand, to increase supply, and to police any market manipulation.  Below is a brief summary on what Democrats have done in all three areas and also an explanation of why we continue to oppose opening up environmentally sensitive areas to drilling.

Reducing Demand 

In December, Congress enacted the Energy Independence and Security Act, which for the first time in three decades raised fuel efficiency standards for cars and trucks.  Higher fuel efficiency standards result in a decrease in the demand for gasoline and it has been estimated that this bill will save American families up to $1000 annually at the pump.  

The House has passed several energy tax bills that create new tax credits and deductions (and extend current credits and deductions) for renewable energy production and energy efficiency investments for homes and businesses and provide new incentives for public power to invest in clean energy.  
 

Increasing Supply

The House and Senate passed legislation that temporarily suspends oil shipments to the Strategic Petroleum Reserve (SPR), which is currently 97% full, through the end of the year.  It is estimated that the increased supply available on the American market from suspending shipment to the SPR could bring gas prices down by as much as 24 cents a gallon.  

The House has voted on legislation (the DRILL Act) to accelerate oil and gas drilling on the 20 million acres of leased land in the National Petroleum Reserve-Alaska (NPR-A), ban exporting Alaskan oil to any foreign country, require oil companies to drill on the 68 million acres of land they have already been leased in the U.S. or lose their leases, and facilitate the completion of oil and gas pipelines from Alaska.  If the already-leased 68 million acres were drilled on and the 20 million acres in the NPR-A were developed, U.S. oil production would double.  
 

Combating Market Manipulation

Some experts estimate that the price of oil has been inflated by up to $60/barrel by excessive speculation.  Accordingly, the House has passed legislation to create a Petroleum Task Force in the Department of Justice’s (DOJ) Antitrust Division, enable DOJ to take legal action against OPEC nations that are manipulating the price of oil, and encourage the Commodity Futures Trading Commission to crack down on price gouging and manipulation in the oil markets.  
 

Continued Opposition to Drilling in Environmentally Sensitive Areas  

House Democrats continue to oppose drilling in the Alaskan National Wildlife Refuge (ANWR).  Drilling there would not produce oil for the U.S. market for years, probably over a decade, and, even then, would have a very minimal impact on prices. Furthermore, the NPR-A actually has more oil than ANWR and it can be produced much more quickly.  

House Democrats also continue to oppose drilling in the Outer Continental Shelf (OCS).  President Bush lifted the executive order prohibiting drilling in the OCS, but the Congressional moratorium remains in place.  Drilling in the OCS would not produce oil for the U.S. market for years (again probably more than a decade) and a spill or accident could have drastic consequences on the environment and on the tourism industry.