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 Why the high prices?

How Congress can take on high gas and food prices

By Congresswoman Virginia Foxx

Over the past 15 months gas prices in North Carolina have steadily risen, and as I write this the price of gas has risen above $3.50.  That’s up more than $1.30 since early 2007.  Many hard-working North Carolinians with billsto pay are cutting back in other areas as the cost of filling up spirals higher and higher. 

And it’s not just gas prices.  Food prices and other consumer items have risen right alongside the price of gas.  I know this is taking its toll on everyone’s finances.  Over the past year the price of many basic food items has increased dramatically.  The cost of wheat has almost doubled, rice is up 122 percent, milk increased 26 percent and the price of eggs jumped 40 percent.  These increases translate into higher prices at the checkout. 

Experts tie these rising prices to an explosion in global consumption of both basic food items and oil.  They chalk up much of the high gas and food prices to demand from emerging middle class consumers in developing nations like India and China. 

While there are many factors behind the exploding price of gas and groceries, there are some underlying issues that could be addressed by Congress.  

For instance, it has been estimated that 30 percent of the U.S. corn crop will end up in our gas tanks thanks to current federal government mandates and subsidies for ethanol production to the tune of 51 cents a gallon.  Not only are ethanol mandates driving up food prices, some experts have said that our production of biofuels requires more energy than these fuels end up yielding in your gas tank. 

That’s simply not a good investment.  In April, Time magazine put it bluntly: “Strange as it sounds, we're better off growing food and drilling for oil” instead of pursuing the current lopsided ethanol craze.  I think the time has come to reexamine our ethanol policies and start bringing down the rising cost of food. 

On the gas prices side of the equation, long-term solutions like drilling for new oil in Alaska and in deep sea waters have been stonewalled by some in Congress for too long. Thanks to the efforts of some environmentalists and their allies in Congress, 85 percent of our deep-sea oil and gas fields are locked up and unavailable for drilling. 

In 2005 I visited Alaska and the Arctic National Wildlife Refuge (ANWR).  Since then I’ve voted in favor of proposals to open the spigot on ANWR’s 10 billion barrels of oil.  These proposals would allow drilling on only 2000 acres out of the nearly 20 million acres in ANWR and total development would leave more than 90 percent of ANWR completely untouched. 

Amidst all the talk about reducing our reliance on foreign oil you might have missed the news that America’s reliance on foreign oil from the OPEC oil cartel increased by seven percent last year.  If we are to bring down the price of gas we must cure this addiction to foreign oil.  We can start by opening up our domestic supplies and by allowing new investment in our oil refining infrastructure. 

Oil refineries are a significant bottleneck in the U.S. gasoline supply chain.  But thanks to overly burdensome federal regulations, we haven’t built a new refinery in the U.S. in the past 30 years.  Today, the U.S. is home to only 149 oil refineries, compared with the 321 we had in 1981. 

I support legislation that would allow new refineries to be constructed in an environmentally sensible way.  I’ve recently co-sponsored legislation that not only streamlines the refinery construction process but also removes many of the obstacles preventing new oil and gas exploration in the U.S.  This legislation, H.R. 3089, promises to bring billions of barrels of American oil to consumers while establishing reasonable environmental safeguards for drilling and refining petroleum. 

I also support reevaluating the federal government’s ethanol policies that have done little to bring down gas prices and have done a lot to jack up the price of food.  We need a fresh approach to ethanol and another look at the benefits of other alternative fuels like switch grass and chicken litter.  If we couple this with a willingness to tap into America’s domestic energy supply we can get the ball rolling to stabilize food and gas prices and get Americans back on the road. 

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