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Say what? Study says climate laws needed to reduce gasoline prices

March 19, 2010
TOPICS: Crude oil
The Natural Resources Defense Council has investigated gasoline prices and determined Oklahoma residents are vulnerable to increased gasoline prices. Their answer to fix the problem, stringent climate and energy legislation that would all but end the use of crude oil as a source of transportaion fuel.

From the Oklahoman:

A recent study by the Natural Resources Defense Council indicates Oklahoma is one of the states most vulnerable to an increase in gas prices, but the head of the Oklahoma Independent Petroleum Association dismissed the environmental group’s suggested solutions.

"Increased government regulations are not the answer to higher energy prices,” association President Mike Terry said.

The council’s report released Wednesday concluded Congress must enact comprehensive climate and energy legislation and reform federal transportation policy to reduce the country’s dependence on oil.

"The way forward is pretty clear,” Natural Resources Defense Council transportation expert Deron Lovaas said. "We need to break our addiction to oil.”

Terry agreed the United States should cut its dependence on foreign oil, but he maintained fossil fuels are vital to the nation and Oklahoma.

"Oklahoma is reliant on oil and natural gas production, and government action that decreases activity in the oilfield will only harm our state’s workers and its economy,” he said.
Terry said increased oil and gas production will provide cost-efficient fuels for consumers while alternative sources are explored.

"Clean energy and renewable energy are goals our country should be focused on, but we cannot abandon current energy sources in hopes of finding new ones,” he said. "Oklahoma and the independent oil and natural gas producers headquartered here hold the key to lessening the nation’s dependence on foreign sources of energy and softening the price spikes we’ve seen in recent years.”

The council’s study contemplated a gas price increase similar to the one the U.S. experienced in the summer of 2008.

It concluded Oklahoma residents could spend more than 9 percent of their income on gasoline if that happened, but Oklahoma City University economist Steve Agee questions the report’s findings because its analysis was oversimplified.

Agee said the numbers for Oklahoma likely were skewed by the amount of interstate traffic in the state.

He said he is not too concerned about predictions that gas prices could reach $3 this summer because economists like to see markets operate efficiently and without government interference.

"Given the seasonal demand for gasoline during the summer due to vacations and summer travel plans, I would not be surprised,” he said. "But this is a normal season increase in demand.”

The council’s report concluded climate and energy legislation is needed to limit carbon emissions and create "millions of clean energy jobs” in the United States. It also advocates a reformed transportation policy to support development of mass transit and other alternatives to driving.

Devon Energy Corp. spokesman Chip Minty said he was surprised the report did not include any discussion of natural gas as an alternative transportation fuel.

"It is 50 percent cleaner than coal, 30 percent cleaner than oil,” he said. "It’s a viable transportation fuel that’s already being adopted by vehicle fleets across the country.”
Terry said natural gas is the logical choice for school buses, trash trucks and other vehicles that travel the same route every day.

"Any substantial increase in the use of natural gas as a transportation fuel will lessen the demand for gasoline and put pocketbook-friendly fuel in consumer gas tanks,” he said.
 
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