Chairman Bingaman has introduced two bills to address important areas of our nation’s energy policy: S. 916, the Oil and Gas Facilitation Act of 2011, and S. 917, the Outer Continental Shelf Reform Act of2011. Both are based on bipartisan, largely consensus work in the Committee on Energy and Natural Resources during the last Congress.

S. 916, the Oil and Gas Facilitation Act, is intended to enhance efficient and appropriate domestic production of oil and gas and to limit the dependence of the United States on foreign sources of oil. It addresses production issues in a variety of ways, including requiring a comprehensive inventory of the oil and natural gas under the waters of the Outer Continental Shelf to inform decisions about where leasing is likely to be most productive; and improvement of the coordination and efficiency of the permitting process for development on federal lands and waters.

S. 917, the Outer Continental Shelf Reform Act, is a verbatim reproduction of S.3516, reported unanimously by the Energy Committee in the last Congress. Its goal is to create a culture of excellence within the regulatory agency and the industry that benefits those who work in the oil industry, those who depend on other marine resources, and all Americans who care deeply about our energy resources, our communities and our marine environment.

Because of the widespread support for this bill, it has been reintroduced exactly as reported last year, providing a good place to start work this year. It will need updating to reflect subsequent events and information from the National Oil Spill Commission and various experts about some refinements that should be made. Chairman Bingaman has been working with Senator Murkowski and others who supported last year’s bill, and will be continuing those discussions. Given the importance of the issue, the bipartisanship that animated the Committee’s work on this issue last year during the oil spill is something that we expect to continue.

The Committee’s work on this legislation will begin with a hearing to be scheduled for next week. Chairman Bingaman hopes to be able to move to Committee markup before the Memorial Day recess. Here is his introductory floor speech:

“Mr. President, yesterday I introduced two bills on subjects of great importance to our national energy policy: the Oil and Gas Facilitation Act of 2011 and the Outer Continental Shelf Reform Act of 2011. Both are basedon bipartisan, largely consensus work in the Committee on Energy and Natural Resources during the last Congress.

“I should note that these important issues are being addressed in separate bills consciously and for a reason. In the past we have crafted comprehensive energy bills that attempt to address all the energy policy issues of the day in one vehicle. There are obvious advantages to that, but there are well-documented disadvantages as well, and I would like to avoid those this year in furtherance of completing our important work.

“There is no disagreement in the Senate about the need to have robust and responsible domestic production of oil and gas. At the same time, there is probably considerable disagreement about how best to address that issue. We need to begin work on that.

“However, ensuring the safety and viability of our operations on the Outer Continental Shelf is a separate matter that deserves attention on its own. The question of how we undertake oil and gas exploration and production on the Outer Continental Shelf appropriately stands apart from the question of where we undertake those activities.

“I do not believe that it would make sense to try to trade off safety or environmental protections against the issue of access, for example. I believe that the Congress should set an appropriate level of safety and environmental compliance regardless of where oil and gas exploration and production is occurring.

“I will also observe that there was much greater consensus on the need to reform the rules governing Outer Continental Shelf production in the last Congress than on other issues such as those related to access to particular areas. Conflating these separate issues into one bill is not likely to be the best path to success in enacting a bill into public law.

“That is not to say that we don’t have a responsibility to address both issue areas. We do. But I believe they should be addressed on parallel tracks, and not in combination. I hope to be able to move toward Committee consideration of both of these bills this month.

“The first, the Oil and Gas Facilitation Act, is intended to enhance efficient and appropriate domestic production of oil and gas and to limit the dependence of the United States on foreign sources of oil.

“The last two years have been a time of real success in increasing our domestic production of both oil and gas, and in reducing our reliance on imported oil. We are currently the third largest producer of oil in the world. The percentage of the oil we use that is imported has declined from 60 percent in 2008 to about 51.5 percent in 2009 and to about 49 percent in 2010. We want to be sure that we continue this progress while protecting our other natural resources and our communities’ health and safety.

“This bill addresses production issues in a variety of ways. It requires a comprehensive inventory of the oil and natural gas under the waters of the Outer Continental Shelf to inform decisions about where leasing is likely to be most productive. To improve the efficiency of the permitting process for development on federal lands and waters, permit coordination offices are reauthorized, and a new coordination office is established for the Alaska region of the Outer Continental Shelf.

“Two provisions facilitate the transportation of Alaska’s abundant oil and gas resources. The amount of federal guarantee instruments is increased to support the construction of an Alaska natural gas pipeline; and the Trans-Alaska oil pipeline system is exempted from certain requirements that unnecessarily slow the permitting process.

“Co-production of geothermal energy by existing oil and gas leaseholders is encouraged by making leases available for that purpose on a non-competitive basis.

“Finally, the bill will potentiallyc ontribute millions to the Federal Treasury by repealing the current law that requires the Secretary of Interior to give relief from royalty payments to certain offshore oil and gas production. The bill would allow the Secretary to provide such relief in appropriate circumstances, but would not require such relief. This avoids inappropriate giveaways of taxpayer-owned oil and gas resources to industry when it is unnecessary for robust domestic production.

“These provisions are drawn almost verbatim from S. 1462, reported by the Committee on a bipartisan basis in the last Congress. The one significant change is that certain funding for the offshore oil and gas inventory provided by S. 1462 was redirected by the Committee in subsequent legislation to be used for research on safety issues related to offshore oil and gas drilling. To avoid spending the same money twice, we have eliminated that funding here so that it could be included in offshore safety legislation. At the same time, the bill retains the authorization of significant appropriations to be used for the oil and gas inventory.

“The Outer Continental Shelf Reform Act, the other bill I am introducing today, is a verbatim reproduction of S. 3516, reported unanimously by the Committee in the last Congress. Because of the widespread support for this bill, I have reintroduced it exactly as reported since I believe this is a good place to begin our work this year. It will need a bit of updating as we move forward. A few of the provisions have largely been overtaken by events, and we have learned from the National Oil Spill Commission and others about some refinements that should be made.

“I have been having discussions with Senator Murkowski and others who supported last year’s bill, and will be continuing those discussions as we move forward. I would hope that we will have the same strong bipartisan support for these efforts as we did last year when we reported this bill during the midst of the worst oil spill in our nation’s history. Our commitment to responsible operations in the Gulf and protection of our citizens and communities should be well understood by all.

“This bill is intended to respect those who lost their lives in the Deepwater Horizon accident and the people of the Gulf who have suffered serious economic and emotional harm by doing what we can to create a better future. It is the particular responsibility of the Committee on Energy and Natural Resources to look to the future of the regulatory agency and the industry. As I said last year when we introduced this bill, our goal must be, of course, to prevent future disasters. But we can and must do more than that.

“Congress should create organizational resources and a set of requirements that will have safety, environmental protection, and innovation at their core. We should require that both industry and agency employees have the expertise, experience, and commitment to quality necessary to handle the complex issues involved. We should set principles in place to create a culture of excellence for the regulatory agency and for the industry that will be a model for the world.

“Thus, this bill reforms the structure of the offices of the Department of the Interior dealing with offshore oil and gas leasing and development to avoid organizational conflicts of interest. It clarifies the breadth of the Department’s responsibilities in managing the resources of the Outer Continental Shelf.

“It increases the safety requirements for exploration, well drilling, and production. It mandates use of best available technology, an evidentiary safety case, and a risk management system that identifies and addresses hazards in advance andmanages for change. It provides for third party review by qualified parties outside the agency of key equipment and well design.

“It addresses the essential need for the Department of the Interior to have in-house research capacity on both the safety and the marine environment issues necessary for the exercise of its regulatory authority. Research departments in these areas will no longer be optional, but are required, and funding is redirected from other areas of research to ensure that this will happen.

“In order to ensure that the rules are enforced, the bill requires collection of fees from industry to fully fund the necessary teams of inspectors. It provides for independent investigations of accidents and the sharing of data so that all can learn from mistakes. It also provides the Department of the Interior with adequate time to carry out necessary reviews and makes the input of other Federal agencies occur in a transparent way. And it increases the civil and criminal penalties applicable to violations of the law and regulations.

“I believe these policies and resources can set us on a new and constructive path toward managing the incredible natural resources of the Outer Continental Shelf. We must recommit ourselves to the goal of excellence in this important endeavor. The fact that oil is no longer gushing into the Gulf of Mexico in no way diminishes the importance of this work.

“Both of these bills address issues of great national importance. We will shortly be scheduling necessary hearings and preparing these bills for Committee consideration — if at all possible before the Memorial Day recess. I look forward to working with my colleagues on the Energy and Natural Resources Committee and in the rest of the Senate on a bipartisan basis – as we have in the past – to address the vital issues presented by both of these bills.

“Mr. President, I ask unanimous consent that the text of both bills be printed in the RECORD.”

# # #

For more information, please contact Bill Wicker at 202.224.5243 orbill_wicker@energy.senate.gov

or Rosemarie Calabro at 202.224.5039 orrosemarie_calabro@energy.senate.gov

Visit our website at http://energy.senate.gov/

Special thanks to Richard Charter

By Amy Harder

Monday, May 9, 2011 |9:35 p.m.

Senate Democrats willunveil legislation on Tuesday that repeals tax breaks for the largestoil and gas companies. The politically charged move comes on the sameday that the GOP-led House votes on the second of three billsexpanding domestic drilling. The vote on the last one is expectedlater this week.

Democratic Sens. Robert Menendez of New Jersey, Sherrod Brown of Ohio, and Claire McCaskill of Missouri will hold a press conference on Tuesday morning to announce the bill. They have introduced similar versions in previous sessions of Congress and even earlier this year.The legislation repeals tax breaks for the biggest oil and gas companies and puts the money toward deficit reduction.

The bill will likely be the one that Senate Majority Leader Harry Reid, D-Nev., brings to the floor, signaling that he has decided not to move forward with a plan that Senate Finance Chairman Max Baucus, D-Mont., floatedl ast month. Baucus’s plan also repeals the tax breaks for thel argest oil and gas companies. But it would have diverted the money to fund clean-energy technologies. By putting the money back into deficit reduction, the Democratic leadership is trying to put Republicans in a tough political position by forcing them to vote on a bill that would repeal tax breaks for the benefit of reducing the debt. By reallocating the money to another set of energy subsidies, Democrats worry that the political messaging would get muddled.

Reid and his office have not indicated when he will bring the bill to the floor, but it likely won’t be until next week at the earliest. It will likely fail, given that efforts to repeal the breaks within the past year have failed. Although the political rhetoric against Big Oil has risen since those votes, it’s likely still not enough to get 60 votes.

Brown and McCaskill are emblematic of the vulnerable Democratic class up for reelection in2012. Brown previewed the introduction of the bill at a press conference at an Ohio gas station on Monday. Menendez is also up for reelection, but he is not as big of a target as Brown and McCaskill, because they both hail from energy-intensive swing states.

The debate over the tax breaks will continue later this week with a Senate Finance Committee hearing on Thursday, where top executives from the five major oil companies are expected to testify.

Special thanks to Richard Charter

http://www.emagazine.com/magazine/lessons-not-learned

MAY/JUNE 2011 ISSUE

Magazine: Currents

May 1, 2011 |Ethan Goffman |

A green sea turtle is released in the Gulf of Mexico after being treated for oil exposure from the Deepwater Horizon spill.
Photos: © u.s.coast guard

By EthanGoffman

An array of shortcomings and missteps led to the Deepwater disaster in the Gulf of Mexico which happened one year ago this past April. They include lax regulation, inadequate cement, blowout preventer failure and a poorly coordinated response. So says the final report of The National Commission on the BP Deepwater Horizon Oil Spill, released on January 11. Not only BP, but the other companies involved with drilling and maintaining the well-Halliburton Co. and Transocean Ltd.-were found negligent,leading the report to characterize the problems as “systemic.” Such an accident, it seems, was waiting to happen.

Jackie Savitz, a senior scientist for the ocean advocacy group Oceana, called the commission’s report “a scathing analysis” that details numerous preventable mistakes. BP and other companies, she notes, “failed the negative pressure test but kept going. They didn’t have enough centralizers, they tested cement that failed, but they went ahead.” Furthermore, argues Richard Charter, the senior policy advisor for Defenders of Wildlife’s marine programs, “the mistakes made were compounded both before and after, indicating a culture of carelessness.”

And the results are still being felt. Between April 22 when the offshore Deepwater Horizon oil rig exploded, sank and began gushing oil, and the following July when the well was capped, more than 4.5 million barrels of oil spewed into the Gulf. In February 2011, Salon reported that scientist Samantha Joye of the University of Georgia found sea floors in the Gulf that were still coated with oil from the spill-and oil-choked sea creatures including dead crabs, tube worms and brittle stars littered the ocean floor.

To minimize the risk of future catastrophic spills, the commission recommended increased government oversight, promoting a culture of safety within the industry, better practices for well integrity and tests for blowout preventers, and increased liability from today’s extremely low $75 million limit. Explains Oil Spill Commissioner Donald Boesch: “These recommendations are a blueprint for vastly improved safety. Our investigation was extremely comprehensive. . . we provided a detailed account of the various mistakes or bad decisions both on the Deepwater Horizon and onshore.” Charter agrees, noting that the key points are to increase redundant systems, to develop better clean-up capacity including better skimmers and to account for the toxicity of dispersants.

But Savitz calls the recommendations “tepid” in light of the devastating impact of oil spills. “I felt like the commission was empowered to come up with bolder recommendations,” she says. “We need more out-of-the-box thinking.” She points out that deep-sea drilling accounts for only 8% of the oil we use and believes that a permanent moratorium is the answer. Oceana’s “Vision 2020” plan outlines ways to lower our crude oil use 26% by 2020 by moving some oil uses, such as heating, to electricity; encouraging electric cars; increasing use of biofuels, particularly algal and switch grass; and improving energy efficiency.

But offshore drilling will almost certainly continue despite serious deficiencies. Charter warns that accident response has not kept pace with conditions in the increasingly difficult drilling environments. “This entire technology has outstripped its response capability,” he says. “It’s archaic compared to the space-age technology for finding and extracting oil.” Currently, the situation is at a standoff; Although the moratorium has been lifted, permits for new wells are not being granted. Yet incessant demand for oil, together with industry pressure, make it likely that drilling will continue. Indeed, as oil prices surged in February and March, the interior department granted the first new deepwater permit since the disaster and announced the likelihood of more to come.

Arguing for the permits, Carlton Carroll of the American Petroleum Institute says: “API and the industry have already taken numerous, concrete actions since the accident to identify and implement additional safeguards.” For “the first time,” he adds, “it has committed to develop the capacity to contain a deepwater blowout.”

But Charter worries about where deepwater drilling might head next-particularly Bristol Bay, Alaska, and the Arctic Ocean, where a similar spill could bring even more horrific consequences. Oil that makes its way beneath the sea ice would be virtually impossible to clean up. While U.S. regulators are currently withholding permits for such drilling, there’s increased pressure for it to move forward as the Gulf tragedy recedes in our collective consciousness.

CONTACTS: Defenders of Wildlife; The National Commission on the BP Deepwater HorizonOil Spill; OceanaVision 2020; RestoretheGulf.gov.

ETHAN GOFFMAN is an environmental writer in the Washington, D.C. region and associate editor of Sustainability: Science, Practice & Policy.

Special thanks to Richard Charter

http://www.realvail.com/article/624/As-Obama-calls-for-end-to-oil-company-tax-breaks-new-report-links-surging-profits-to-lobbying-efforts

Obama is right; we need to cut oil subsidies and fund solar and other renewal energy sources. DV

By David O. Williams
Real Vail – May 3, 2011

With Congress and the White House increasingly railing against record oil company profits, a study latelast week linked those windfalls to millions spent on lobbying and direct campaign contributions.

The nonprofit Checks and Balances Project last week released an analysis of the skyrocketing profits of the nation’s top five oil and gas companies in the wake of near-record gas prices and compared those profits to lobbying expenditures and political contributions in 2010.

ExxonMobil reported first quarter 2011 profits of $10.7 billion compared to $6.3 billion in 2010, a 69.8-percent increase. The nation’s largest oil and gas company spent $12.45 million on lobbying in 2010 and made $928,959 in political contributions to Republicans and $109,500 to Democrats.

Chevron, which reported Q1 profits of $6.2 billion in 2011 compared to $4.55 billion in 2010, spent more on lobbying in 2010 ($12.89 million)but less on political contributions ($473,000 to Republicans and $122,000 to Democrats).

While citing a growing number of Republicans on the record backing an end to oil and gas subsidies – including House Speaker John Boehner- Checks and Balances points out key Republican committee members continue to block such efforts, including House Natural Resources Committee subcommittee Chairman Doug Lamborn of Colorado.

“These profit reports show big oil is making big bucks from high gas prices at the pump,” Denver-based Checks and Balances Deputy Director Matt Garrington said in a release.

“Big oil spent $63 million lobbying Congress and $2 million in campaign contributions last year so politicians would hand out $4 billion every year in taxpayer-funded subsidies.”
Lamborn last month voted against ending royalty relief for offshore drilling companies and has been hammering on Interior Secretary Ken Salazar for policies limiting drilling on federal lands. Salazar fired back that oil and gas companies aren’t coming close to utilizing all the leases they currently hold on public lands around the nation.

In his national radio address on Saturday, President Barack Obama said he wants Congress to end $4 billion in annual tax breaks for the oil and gas industry, according to the Associated Press.

“These tax giveaways aren’t right,” Obama said. “They aren’t smart. And we need to end them. An investment in clean energy today is an investment in a better tomorrow, and I think that’s an investment worth making.”

AP reported that “drivers in 22 states are paying more than the national average of $3.91 per gallon. In Alaska, California and Connecticut, it’s $4.20 or more,” slowing economic growth. Senate Majority Leader Harry Reid, D-Nev., said he will weigh Obama’s proposal as early as this week.

Special thanks to Richard Charter

by Carl Hulse, 5-3-11

The killing of Osama bin Laden will dominate Congressional conversations this week, but top aides said Monday that lawmakers still intended to pursue their planned agenda as members of the House and Senate return from spring break.

That means plenty of talk about the debt limit fight as well as efforts by House Republicans and Senate Democrats to try to score quick political victories tied to consumer unrest over rising gas prices.

The House leadership has scheduled votes for Thursday on a pair of bills that would spur more offshore oil and gas exploration and expedite the permitting process. Top Republicans see those measures as reinforcing their argument that Democrats and the Obama administration are partly responsible for rising prices at the pump because they have stifled domestic production.

In the Senate, Senator Harry Reid, the Nevada Democrat and majority leader, is pursuing the issue from another direction with a push to eliminate billions of dollars in special tax breaks for oil companies rolling in big profits at the moment.

“We need to take away the subsidies of these five major oil companies,” Mr. Reid told reporters last week. “I’m going to try to get it done as soon as I can do it procedurally in the Senate here.”

The votes are likely to make good theater but probably won’t produce any immediate results since the Senate is unlikely to take up the House bills, and the House doesn’t seem inclined to consider cutting oil company subsidies at the moment.

In another politically charged series of votes, the House is set to vote Tuesday on a plan to block the administration from spending money on some key initiatives related to the new health care law. Oneof the measures would block grants that are to go to states to set up new health insurance exchanges for consumers – a central element of the health law.

Since they have been unable to overturn the legislation outright, House Republicans intend to go after the law piece by piece. But the proposals appear to have little chance at even being considered in the Senate, leaving a stalemate. The House is expected to vote Wednesday on a measure to prohibit federal dollars from being spent on abortions, a policy that is now in place under a ban that is renewed annually.

The Senate career of Senator John Ensign, Republican of Nevada, officially concludes with his resignation as of May 3. Representative Dean Heller, a House member from Nevada who was already running for the seat in the 2012 election, has been appointed to fill the vacancy and could be sworn in quickly.

The bipartisan leadership of the Congress is scheduled to dine at the White House on Monday with President Obama and his wife. And Vice President Joseph R. Biden Jr. is set to convene negotiations over how to rein in the deficit at a meeting with Congressional officials on Thursday.

Potential Mideast unrest should not impact gas price debate

Darren Goode, Politico, 5-2-11

On the surface, the killing of Osama bin Laden is a tailor-made argument for lawmakers about the need to reduce America’s dependence on foreign oil amid the record high gasoline prices this spring.

Indeed, the Al Qaeda leader’s death may be the most tactile reminder of U.S. entanglements in the Middle East and Central Asia. But the reality is bin Laden’s death most likely won’t affect oil prices that much considering he’s been on the run for over a decade and the latest run-up in crude prices is primarily due to political uncertainty in Arab countries.

That means members of Congress are thus far steering clear and staying on message as they prepare for several weeks of bickering over gas prices.

“Any realistic discussion of oil politics and gas prices has always involved the inherent instability of Middle East politics whether or not Osama Bin Laden was alive or dead,” said Eben Burnham-Snyder, spokesman for House Natural Resources Committee ranking member Ed Markey (D-Mass.).

House and Senate leaders will press ahead as scheduled on the floor and before the TV cameras with a debate that largely pits Republican plans to expand domestic oil and gas drilling against a White House-led effort to scale back billions in oil industry tax incentives.

The average price of a gallon of gasoline is $3.96, the Energy Information Administration reported Monday.

http://www.politico.com/news/stories/0511/54100.html#ixzz1LIKp7YfM

POLITICS: Amid reactions to bin Laden’s death, many ask, ‘What about gas prices?’

Anne C. Mulkern, E&E Daily, 5-2-11

After learning that U.S. forces had killed Osama bin Laden, Republican Sen. James Inhofe of Oklahoma proclaimed, “We rejoice that this monster is dead.”

Inhofe and other lawmakers praised the news and the efforts that led to the death. But the American moment of victory appeared short-lived. On social networking sites Facebook and Twitter, many urged President Obama and Congress to put the focus back on fuel costs.

“Now that he is dead! Can we get some substantial relief at the Gas pump,” Neal Harris wrote on the Facebook page of Sen. Lindsey Graham (R-S.C.). “We need some investigating of the oil market and who is behind of the inflating speculations of the oil …America is Going down the Tubes. It cost me over a hundred dollars to fill my truck with the cheap alcohol stuff that gets less miles per gallon. Help … the need is now.”

Alli Rhae Belenger of Boston tweeted, “I’ll give Obama all the praise in the world for killing Bin Laden; but because of him I gotta pay hundreds for Health Care and $3.99 for gas.”

A woman using the Twitter handle Akhmed wrote, “Now that Osama is dead, will the gas prices go down? Cause that’s all I care bout ha.”

Others saw conspiracy in Obama’s announcement about bin Laden.

“The only reason Obama tellin people Im dead is so he can raise gas prices,” tweeted someone using the moniker “OsamaBinIaden.” Eliza Lily Rodriguez of New York tweeted, “Now how about those gas prices Obama?”

Senate Majority Leader Harry Reid (D-Nev.) fielded questions today about the bin Laden apprehension’s potential impact on world oil markets. “I think the international economic community is relieved that this man is out of circulation,” he told reporters.

Most lawmakers steered clear of gas prices and praised the actions that led to bin Laden’s death.

http://www.eenews.net/Greenwire/2011/05/02/3/

Survey: Gas Prices Cause Shoppers To Downgrade

Jonathan Welsh, Wall Street Journal, 5-3-11

Rising fuel prices are getting the attention of car shoppers and compelling many to shift their priorities for picking a new vehicle. More than half of consumers surveyed said they have already lowered their sights somewhat regarding the next cars they plan to buy.

Kelley Blue Book, an auto industry research company that tracks vehicle pricing and consumer trends, says 84% of shoppers responding to its Market Intelligence survey in April said gasoline prices have influenced the types of vehicles they consider buying. The survey results show a steady increase this year in the importance of fuel prices in purchasing decisions.

Kelley says the number of consumers who say better fuel economy was their main reason for planning to purchase their next vehicle has risen 12% since the beginning of the year through April. According to the survey, 58% percent of people responding said the economy has caused them to make downgrades including picking smaller vehicles and smaller engine sizes. Consumers also said they plan to forgo certain extra-cost optional equipment. The company said 32% are considering buying a used vehicle instead of a new one.

http://blogs.wsj.com/drivers-seat/2011/05/02/survey-gas-prices-cause-shoppers-to-downgrade/?mod=google_news_blog

U.S. gas prices rise again

Dan Berman, Politico, 5-3-11

The average price of a gallon of regular gasoline continued its march to $4, hitting $3.96, the Energy Information Administration reported Monday afternoon.

That’s 8 cents higher than last week and 86 cents higher than on Jan. 31.

Premium unleaded buyers are paying an average of $4.20 pergallon, also an 8 cent increase from last week.

To be sure, prices are much higher in several states and cities. According to AAA, motorists in California will pay $4.26 for a gallon of regular on average, $4.15 in New York and $4.12 in the District of Columbia.

Want to save money? Head to the Rocky Mountains. In Colorado, drivers pay an average of $3.68 per gallon of regular. It’s $3.66 in Montana and $3.60 in Wyoming.

http://www.politico.com/news/stories/0511/54146.html#ixzz1LIL1x9I4

Ouch! $5-a-gallon gas in future?

United Press International, 5-2-11

NEW YORK, May 2 (UPI) — Gas prices already hover around $4 a gallon across the United States, causing a few analysts to say shelling out $5 a gallon later this year isn’t a stretch.

But they’re in the minority. The more common view among energy-sector analysts is that gasoline prices this year won’t climb by another 28 percent needed to hit the $5 mark, The Christian Science Monitor reported.

Nine states and the District of Columbia already pay more than $4 a gallon. The average price of $3.91 per gallon of regular unleaded gasoline on Monday was $3.952, the AAA Daily Fuel Gauge Report indicated.

Gas prices have jumped 36 percent during the past year, zinging consumers in the wallet and challenging the prospect economic growth could slow down as a result.

http://www.upi.com/Business_News/2011/05/02/Ouch-5-a-gallon-gas-in-future/UPI-13121304353983/#ixzz1LIQCsg5K

Buffett, Welch say gas prices could hurt economy

Associated Press, 5-2-11

OMAHA, Neb. — Berkshire Hathaway CEO Warren Buffett and former General Electric Co. CEO Jack Welch both say the economy is improving, but rising gas and food prices could hurt growth.

The two revered businessmen appeared together on CNBC Monday. Buffett’s interview had been scheduled to discuss last weekend’s Berkshire Hathaway ( BRK – news – people )shareholders meeting, but the death of Osama bin Laden was also discussed.

Buffett said the reports he gets from Berkshire’s 80-odd businesses show the economy is still improving slowly except for businesses related to the U.S. housing market.

But Buffett and Welch both expressed concern that rising gas and food prices will hurt consumer spending.

Welch says the increase in gas prices sucked $100 billion out of the economy in the first quarter.

http://www.forbes.com/feeds/ap/2011/05/02/general-industrials-us-buffett-media_8444971.html

Bin Laden death spurs wild oil ride, but prices stillclimb

Mark Glover, The Sacramento Bee, 5-3-11

The death of Osama bin Laden sent crude oil on a roller coaster ride Monday but appears unlikely to stop the ongoing spike in gas prices.

The average retail price of gas in the Sacramento area rose 4.5 cents to $4.19 a gallon over the past week, according to Monday’s weekly report by SactoGasPrices.com, a GasBuddy.com website.

The previous week, area prices were virtually unchanged.

The current price is $1.13 a gallon higher than it was a year ago and 19.1 cents higher than a month ago.

Nationally, the average price spiked 7.1 cents last week to $3.92 a gallon – 29.2 cents higher than last month and up $1.01 from last year.

For a second week, analysts noted that the nation’s stocks of motor gasoline and gasoline-blending components are shrinking -205.5 million barrels vs. 219.7 million on March 18.

“Gas supply certainly does trump everything else,” said Jason Toews,co-founder of GasBuddy. “The changeover from winter to summer(blend) gas and some refinery outages have been pushing prices up.

“Anything that (depletes) supply makes the price go up. And if supply dries up, then you have panic buying.”

http://www.sacbee.com/2011/05/03/3596511/bin-laden-death-spurs-wild-oil.html#ixzz1LIGwOjnF

Gas prices set record in Chicago

Chicago Tribune, 5-2-11

U.S. gasoline prices surged ever closer to the $4-a-gallon threshold in the latest week, placing more pressure on lawmakers to show voters they are working to provide relief at the pump.

In Chicago, the average price for a gallon of gasoline jumped 10 cents to hit $4.352 over the past week, the Energy Department said. That exceeds the city’s all-time high of $4.303 set on July 7, 2008.

From the White House to Congress, politicians facing election next year are eager to appear active on this issue, which could prove difficult to fix in the short run.

The average price of U.S. gasoline jumped 8.4 cents to $3.96 a gallon in the week ending Monday, the U.S. Energy Information Administration said a weekly update.

Gasoline is up $1.07 a gallon compared to a year ago, with oil above $113 a barrel on Middle East unrest and a weak dollar.

Consumers in New England, the Midwest and on the West Coast were already facing fuel costs averaging above $4 a gallon.

The skyrocketing gasoline prices have lawmakers scrambling to act, but there is little they can do to lower fuel costs quickly, analysts said.

“The political pressure is very strong and the need to do something is very strong, but I don’t expect there are many things they can do that will give immediate relief,” said David Pumphrey, of the Center for Strategic and International Studies, who once worked at the Department of Energy.

http://www.chicagotribune.com/business/breaking/chibrkbus-gas-prices-jump-again-in-us-set-record-in-chicago-20110502,0,4508145.story

Pump shock: Gas average near $4

Thomas Grillo, Boston Herald, 5-2-11

The Bay State’s average gasoline price rose sharply over the past week, creeping closer to the psychological level of $4 per gallon and sparking fears of pain at the pumps this summer.

In July 2008, gas prices peaked at $4.09 a gallon in Massachusetts and $4.11 a gallon nationwide.

“There’s a 50/50 chance that we will surpass that record,”said Patrick DeHaan, senior petroleum analyst at GasBuddy.com.”Prices traditionally peak in the first week in May, but it’s unclear what impact Osama bin Laden’s death will have on the oil markets.”

AAA Southern New England’s weekly survey of Massachusetts gas prices found self-serve, regular averaging $3.95 per gallon, up 12cents in a week and 88 cents since the start of the year. A year ago, gas averaged $2.86.

The range in gas prices from station to station is a whopping 86 cents, according to BostonGasPrices.com. The lowest price of $3.83 was reported at Prime Energy in Burlington yesterday and the highest price of $4.69 at United in Lexington.

A report tomorrow from the U.S. Department of Energy on the nation’s gas supply and demand will shed more light on whether average prices will top the state record set nearly three years ago.If gas supplies continue to fall, DeHaan said, prices will rise. If supplies are up, prices should level off, he added.

“There’s no way to predict pricing until we see those numbers,” DeHaan said.

Matthew LeLacheur, executive director of the New England Service Station and Automotive Repair Association, said it’s hard to imagine gas prices falling anytime soon.

“Short of settlement of the unrest in the Middle East which will probably get more restless after the death of Osama, I can’t see prices falling,” he said. “Prices typically rise in the summer because it’s more expensive to refine summer fuel than winter fuel.”

http://www.bostonherald.com/business/general/view/2011_0503pump_shock_gasaverage_near_4/srvc=home&position=recent

Eliminating Oil Subsidies: Two Cheers For President Obama

Jerry Taylor and Peter Van Doren, Forbes, 5-3-11

Last week President Barack Obama responded to rising public anger over soaring gasoline prices by banging the drums for the elimination of various tax breaks enjoyed by the oil and gas industry. Although House Speaker John Boehner, R-Ohio, initially suggested that he might be open to President Obama’s proposal, the House GOP leadership chose to answer the president’s weekly radio address–which advocated elimination of those tax breaks–with freshman Tea Party Congressman James Lankford, R-Okla., who charged that the plan was about “hiking taxes by billions of dollars.”

“The president may think he’s punishing CEOs of big companies,” said Lankford, “but his plan will hurt the everyday consumer of energy and imperil the jobs of millions of hardworking people in American-based companies.”

First of all, let the record show that President Obama is right and the GOP is wrong about these tax breaks. They make the economy less–not more–efficient and do nothing to reduce prices at the pump.

Although the president hopes to eliminate eight specific tax breaks–which cost the Treasury $43.6 billion over 10 years–only three, accounting for $31.9 billion of that total, are particularly important. Conservatives have no business defending any of them.

The largest tax break at issue is a tax credit passed in 2005, which is available to all U.S. manufacturers. Oil and gas companies qualify for that credit, so they will likely deduct somewhere in the neighborhood of $18.3 billion from their tax bill over the next 10 years. Note that this isn’t really an “oil subsidy”; it’s a manufacturing subsidy that oil and gas companies–along with many other companies–enjoy.

Rigging the tax code to make investments in manufacturing artificially more attractive than investments in something else is an enterprise designed to harm non-manufacturers for the benefit of …manufacturers. Conservatives who want government to leave markets alone have no business throwing their political bodies in front of this tax break. If their political rhetoric means anything, they would see the president’s bid and raise him by calling for total repeal of this tax break for everyone, not just for oil and gas companies.

http://www.forbes.com/2011/05/02/eliminate-oil-subsidies.html

Special thanks to Richard Charter