Archive for March, 2006

Watch: Helping America Realize Its Fuel Independence

Friday, March 31st, 2006

You can now watch the bipartisan press conference announcing the introduction of HR.4409, The Fuel Choices for American Security Act, pathbreaking legislation aimed at reducing our dependence on foreign oil based on the Set America Free Coalition’s Energy Security Blueprint, led by Reps. Kingston, Saxton, and Engel.
Click to watch.
Is your representative on board yet?

Welcome aboard!

Friday, March 31st, 2006

We’re pleased to announce that Senator Clinton has become a co-sponsor of S.2025, The Vehicle and Fuel Choices for American Security Act, joining Senators Bayh, Brownback, Coleman, Lieberman, Sessions, Salazar, Chafee, Akaka, Isakson, Obama, Lugar, Graham, and Bill Nelson in championing this critically important bill. Kudos!

Terrorists have marked oil as a target

Thursday, March 30th, 2006

Iraq’s oil minister Hashem al-Hashemi said that exports via the northern pipeline to the Turkish port of Ceyhan would not be resumed for 8-12 months due to sabotage. Terror attacks against Iraq’s oil infrastructure are tracked here.

Exports via a pipeline to the Ceyhan terminal on Turkey’s Mediterranean coast resumed only for a few days in January. Exports had already been halted for weeks by a major attack in October.

Iraq’s exports sunk to their their lowest level since 2003 in December and January at about 1.1m barrels per day (bpd). Mr Hashemi told Reuters Iraqi oil exports for March were expected to reach 1.5m bpd.

Iraq is not the only place oil infrastructure is under attack. Islamic terrorists have identified the world energy system as the Achilles’ heel of the West and have made attacking it a central part of their plan.

EIA expects gas market to tighten

Thursday, March 30th, 2006

The Wall Street Journal reports that at a hearing yesterday in the Senate Environment and Public Works Committee, Guy Caruso, head of the DOE’s Energy Information Administration, testified that “he expects every major refiner to stop using MTBE prior to the summer driving season, making the market for gasoline “very tight” in the first half of 2006.” The Journal adds “Mr. Caruso hinted that Congress may want to boost ethanol imports to aid the transition from MTBE, saying high tariffs are suppressing imports.” and reports that Sen. John Warner (R., Va.) said that Congress may need to relax tariffs so ethanol supplies from countries such as Jamaica, Mexico and Brazil are allowed to satisfy demand unmet by U.S. production.

We don’t tax oil whether it’s imported from Saudi Arabia, or Mr. Chavez in Venezuela, but we do tax ethanol coming in from Brazil. All told today the tax on ethanol imports comes up to about 57 cents a gallon. One of the provisions included in HR.4409, the bipartisan Fuel Choices for American Security Act introduced in the House, is a removal of the ethanol tarriff.

Coalition member Gal Luft wrote about this back in August.

Poll: Americans reach tipping point on oil dependence

Thursday, March 30th, 2006

A new survey of U.S. public opinion on foreign policy expresses intense public concern over U.S. dependence on foreign oil:

“No change is more striking than that relating to the public’s opinion of U.S. dependence on foreign oil. Americans have grown much more worried that problems abroad may affect the price of oil. The proportion of those who said they “worry a lot” about this occurring has increased from 42 percent to 55 percent. Nearly nine out of ten Americans asked were worried about the problem — putting oil dependence at the top of [the survey's] 18-issue “worry scale.”

Virtually all Americans surveyed (90 percent) said they see the United States’ lack of energy independence as jeopardizing the country’s security, 88 percent said they believe that problems abroad could endanger the United States’ supply of oil and so raise prices for U.S. consumers, and 85 percent said they believe that the U.S. government would be capable of doing something about the problem if it tried. This last belief may be the reason that only 20 percent of those surveyed gave the government an A or a B on this issue; three-quarters assigned the government’s performance a C, a D, or an F.”

Milt Copulos testimony this morning

Thursday, March 30th, 2006

Milt Copulos, president of the National Defense Council Foundation, testified this morning in front of the Senate Foreign Relations Committee about the hidden cost of oil. A few quotes from his testimony:

“The [oil] supply disruptions of the 1970s cost the U.S. economy between $2.3 Trillion and $2.5 Trillion. Today, such an event could carry a price tag as high as $8 Trillion ? a figure equal to 62.5 percent of our annual GDP or nearly $27,000 for every man, woman and child living in America. [...]

“The principal reason why we are not fully aware of the true economic cost of our import dependence is that it largely takes the form of what economists call ‘externalities,’ that is, costs or benefits caused by production or consumption of a specific item, but not reflected in its pricing. It is important to understand that even though external costs or benefits may not be reflected in the price of an item, they nonetheless are real.

“In October of 2003, my organization, The National Defense Council Foundation, issued ?America?s Achilles Heel: The Hidden Costs of Imported Oil,? a comprehensive analysis of the external costs of imported oil. The study entailed the review of literally hundreds of thousands of pages of documents, including the entire order of battle of America?s armed forces and more than a year of effort. Its conclusions into divided the externalities into three basic categories: Direct and Indirect economic costs, Oil Supply Disruption Impacts and Military Expenditures.

“Taken together, these costs totaled $304.9 billion annually, the equivalent of adding $3.68 to the price of a gallon of gasoline imported from the Persian Gulf. [...] When we revisited the external costs, taking into account the higher prices for crude oil and increased defense expenditures we found that the ?hidden cost? had skyrocketed to $779.5 billion in 2005. That would be equivalent to adding $4.10 to the price of a gallon of gasoline if amortized over the total volume of imports. For Persian Gulf imports, because of the enormous military costs associated with the region, the ?hidden cost? was equal to adding $7.41 cents to the price of a gallon of gasoline. When the nominal cost is combined with this figure it yields a ?true? cost of $9.53 per gallon, but that is just the start.

“Because the price of crude oil is expected to remain the $60 range this year, expenditures for imports are expected to be at least $320 billion this year. That amounts to an increase of $70 billion in spending for foreign oil in just one year. That increase would raise the total import premium or ?hidden cost? to $825.1 billion, or almost twice the President?s $419.3 billion defense budget request for fiscal year 2006. If all costs are amortized over the total volume of imports, that would be equivalent to adding $5.04 to the price of a gallon of gasoline. For Persian Gulf imports, the premium would be $8.35. This would bring the ?real? price of a gallon of gasoline refined from Persian Gulf oil to $10.86. At these prices the ?real? cost of filling up a family sedan is $217.20, and filling up a large SUV $325.80.”

The second part of the testimony is a call to action, including the following:

“I should note that Chairman Lugar and his colleagues Senators Chaffee, Coleman, Nelson and Obama deserve particular praise for their sponsorship of S.2025, the Vehicle and Fuel Choices for American Security Act, which is based on the Energy Security Blueprint of the Set America Free Coalition, of which I was a founding member. It is focused on reducing our dependence on foreign oil, not by compromising the American way of life, but by encouraging fuel choice, utilization of the vast array of America?s domestic energy resources and accelerated deployment of advanced vehicle technologies. It is clear that this sort of bipartisan effort is exactly the kind of action that is required if we are to make any progress on this critical issue. ”