Why Congress Can't Fix Your Gas Prices Pain

Not much lawmakers can do.

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Less than two weeks ago, members of Congress were back at home getting more than an earful from constituents about high gas prices across the country. Last week, they came back to Washington ready to tackle the problem, unleashing legislation and talking points aimed at a fix. Still, gas prices keep rising, and both lawmakers and regular citizens are coming around to the reality that there's really not too much that Congress can do about it.

[See editorial cartoons about gas prices.]

"It is dishonest for any of us to say that there's some magic wand that can be waved to bring down gas prices," Missouri Democratic Sen. Claire McCaskill said at a press conference on Tuesday.

Economists and energy policy experts point to any number of reasons why gas prices are soaring these days. Many say that it's a simple matter of supply and demand. While the world begins to rebound from the global recession, the demand for crude oil has increased, mostly in emerging markets like China, Brazil, and the Middle East. According to the Energy Information Administration's latest short-term outlook, that worldwide demand should keep rising at least through 2012. Mix that increase in demand with a disrupted supply from Libya and other oil producers engaged in conflicts related to the so-called "Arab Spring." And earlier this year, in March, the Organization of Petroleum Exporting Countries, a cartel of state-run oil producers better known as OPEC, slashed their output by 800,000 barrels per day, which also decreased supply globally. [See editorial cartoons about the Middle East uprisings.]

For Americans, the nation's weakened dollar has put additional strain on gas consumers, as commodity prices have increased across the board. Fingers of blame are also pointing at oil futures speculators, though it's debatable whether speculators have anything to do with current prices.

With uncertainty on Capitol Hill about why prices have gone up, there's a parallel debate about how to bring them back down. In the meantime, Congress is floating a number of pieces of legislation to help solve Americans' gas price dilemma. But, given the partisan environment, none of the bills seem to be going anywhere, and even if they did, there's little chance that any would deliver a real solution in the short term.

The bulk of House floor time this week has been spent debating bills on offshore drilling. Republicans want to speed up the leasing and permitting process to increase access to the country's own energy sources. They argue that by increasing domestic supply, and thus decreasing dependence on foreign sources, prices will go down for the American public. This may be a step in the right direction. "Increasing supply to the market, as we know from Econ 101, has the effect of decreasing price," says Brian Johnson, senior tax adviser at the American Petroleum Institute.

Even so, in addition to environmental concerns, the problem with these bills is that most of the potential drilling discussed is still years away from actual production. And that is if the Republicans' pro drilling bills even had a chance to pass outside the House. As long as Democrats in the Senate push back to encourage oil spill safety and prevention measures, the Republicans' attempt this week in the House is likely to be in vain. [Read the U.S. News debate: Should offshore drilling be expanded.]

Another way to increase supply in the short-term is to release oil from the country's Strategic Petroleum Reserve, a tactic used by both Presidents Bush to address high gas prices. But this idea too comes with complications. The reserve now holds more than 700 million barrels of oil, which is enough to sustain the country for little over a month at current rates of consumption. However the reserve, created after the Arab oil embargo in the 1970s, is intended for emergencies rather than as a response to higher prices. Since the line between high prices and emergency could be unclear, those opposed to releasing oil from the reserves worry that the amount of oil released could get out of hand and could create a shortage in case of a more serious scenario. However, several lawmakers support the idea, especially if the oil is released in set amounts. Massachusetts Rep. Ed Markey, the top Democrat on the House Natural Resources Committee, has proposed a bill that would have the president release 30 million barrels of oil to the markets. But as 30 million barrels is just a small percentage of global consumption, many experts doubt that any significant pricing effect would last. "The strategic petroleum reserve would be a short-term message to Saudis and to speculators that would drive down prices in the short term. It is not a long-term solution. There is no way that the United States at 2 percent of the world's oil reserves and 25 percent of the world's consumption of oil can make up for our oil deficit," says Eben Burnham-Snyder, a Markey spokesman. "That's why a long term solution must include things like all-electric vehicles, wind and solar, other clean energy alternatives that move us away from oil entirely as a commodity."

Corrected on 05/11: A previous version of this article misspelled Eben Burnham-Snyder's name.