26 April 2006

The real reason for the high cost of fuel

It's going into the mail this afternoon:

Appalchian Gun Trash
PO Box 1234
Smalltown in Eastern Kentucky

Senator Mitch McConnell
1885 Dixie Highway Suite 345
Fort Wright, KY 41011

Dear Senator McConnell

I don't like paying almost $3 for a gallon of gasoline and I also don't like the crocodile tears coming out of DC. I expect theatrics from the idiot Shumer and his ilk. But to hear Frist and Hastert singing the "Big Oil is the culprit" tune is disgusting. I thought Republicans were above that.

I realize supply and demand play a large part of it. But I also read in the Wall Street Journal that Congress is a big part of the problem. Why am I not surprised?

It appears that the energy bill you folks passed last summer didn't help the situation. That bill gave the ethanol lobby a mandate that forces us to use 7.5 billion gallons annually of ethanol oxygenate by 2012.

However, at the same time, Congress refused to provide liability protection to the makers of MTBE, an alternative oxygenate that has been hit with lawsuits. So naturally, those manufacturers are leaving the market, while ethanol producers (despite their promises) cannot produce enough to compensate for the loss of MTBE in the supply chain.

The consequences? Well, last year, prior to passage of the energy bill, ethanol was selling for $1.45 a gallon. By December it had reached $2 and is now going for $2.77. So refiners are having to buy both oil and ethanol at sky-high prices and naturally, those costs are passed on to the consumer.

But, the important thing is how do we bring the price of fuel down? Well, the Journal had some suggestions, some sensible suggestions:

- Congress could end the 54-cent-a-gallon tariff on imported ethanol. That would especially help drivers in coastal states suffering from spot shortages.

- The Senate needs to consider the legislation passed by the House passed last year to reduce the number of "boutique fuels" to six from 17. While they may reduce pollution, they also raise gas prices and make it difficult to move gas around the country during shortfalls.

- And finally, Congress has to open more of the U.S. up to oil and gas exploration. Had the Senate opened up the Arctic National Wildlife Refuge to exploration in 2001, some of that oil might now be joining American supplies and reducing our dependence of foreign sources.

So, tell Frist and Hastert to spare us the theatrics about how Big Oil is responsible for this. Congress shares a large responsibility in this problem and Congress needs to fix it.

I look forward to your reply.

Thank you

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