Pain at the Pump

Gas prices over $4 per gallon are no longer an uncommon site in California. In Santa Barbara, the average price is over $4. This significant price threshold has many California residents reeling from the painful price of a fill-up, and is a bitter reminder of our overwhelming reliance on oil as our single energy source in the transportation sector.

The recent oil price spike being felt at the pump makes HR910, the Upton-Inhofe “Energy Tax Prevention Act” being worked through the House, incredibly scary. In short, the bill would end the EPA’s ability to regulate greenhouse gas emissions and California’s ability to improve air quality by setting strong tailpipe standards. Why does this matter? Reducing greenhouse gas emissions has the ancillary benefit of reducing petroleum consumption, the exact move our economy needs to reduce the impact of inevitable future oil price shocks.

The federal fuel economy and greenhouse gas emissions standards for 2012-2016 (developed by the Environmental Protection Agency, National Highway Traffic Safety Administration, and California Air Resources Board, with automaker buy-in) illustrate the benefit of smart emissions policy. The EPA estimates that the standards will save our economy $240 billion, at a cost of $52 billion, while providing the emissions reduction equivalent of taking 58 million cars off the road for one year. In other words, by investing a little into advanced vehicle technology, we can save lot at the pump, and in health and environmental costs. HR910 would seriously undermine our government’s ability to set similar policies in the future.

Instead of setting our economy on course toward energy independence, HR910 follows the “Drill baby drill” logic championed by vocal a subgroup of politicians, who argue the need to open any and every natural resource available to satisfy our insatiable thirst for oil. Even President Obama is prepared to encourage new drilling in the face of rising gas prices. However, while the expanding domestic drilling might modestly lessen our immediate foreign dependence on oil, it is not a sustainable long-term energy policy. Even as the President announced his support for safely developing existing, unused oil leases, he reminded us of the short-term nature of this approach: Our nation consumes one-quarter of the world’s oil but controls only two percent of the world’s reserves.

The key to alleviating our susceptibility to oil price shocks lies in: strong policies focused on reducing our oil dependence, creating market certainty for new renewable energy and clean tech sectors, and accounting for the true cost of oil production and consumption by putting a price on its externalities. HR 910 would do the opposite, and as anyone who has filled up recently can attest, that is bad policy.