Slump at the Pump no Reason for Complacency

COMMENTARY Environment

Slump at the Pump no Reason for Complacency

Oct 29, 2008 1 min read

Former Senior Policy Analyst, Energy and Environment Thomas A. Roe Institute for Economic Policy Studies

Ben Lieberman was a specialist in energy and environmental issues.

Seeing a sharp drop in gasoline prices- - over a dollar per gallon off summer highs - - is one rare piece of good news these days for consumers. But now is not the time to hit the brakes and rest easy, because Washington still needs to do some things to ensure more affordable pump prices.

 The main reason for the price plummet - - an economic downturn that dampened demand for gas - - is one nobody expects (or wants) to last forever. If we do nothing, prices will go right back up to record levels as soon as the economy turns around.

Last summer's record-breaking oil and gasoline prices- - $147 per barrel and $4.11 per gallon - - finally woke up Congress, which took a positive step by eliminating restrictions on drilling in 85 percent of our territorial waters. But as prices dip below $3 per gallon and the memory of $80 summertime fill-ups fades, some in Congress talk about reinstating the moratorium on offshore drilling after the elections.

Such a move would be shortsighted. There's no room for complacency about energy supplies and prices - - all the more so given that, despite the economic slump, most experts predict increasing demand for oil and gasoline in the years ahead. Without new drilling to meet that demand, a return to $4-a-gallon gas, or higher, is all but inevitable.

In addition to more offshore drilling, Congress should look at onshore prospects such as a sliver of Alaska's Arctic National Wildlife Refuge, the nation's single most promising untapped source of oil. An estimated 10 billion barrels lie beneath a few thousand acres at the edge of ANWR, a 19.6 million-acre refuge.

Washington also should consider slashing the red tape and delaying tactics of government bureaucrats and anti-drilling activists alike, which add years to the time it takes to bring new wells online.

 And there also is something the federal government needs to avoid doing, and that's slapping costly restrictions on oil and gas in the name of fighting climate change. If the new Congress takes up a big global warming bill, it practically will guarantee July's record of $4.11-a-gallon gas will be broken again and again.

Gasoline looks like a bargain to motorists compared to three months ago, and it should stay that way for at least several more months. Beyond that, it's up to Washington to take steps to prevent more pain at the pump.

Ben Lieberman is senior policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

First appeared in the DC Examiner