June 17, 2008
A Bold & Comprehensive Plan To Lower Gas Prices

by Kieran Michael Lalor

As gas prices in the Hudson Valley approach $5 per gallon, it is clear that something has to change. I have developed a comprehensive 5-part plan to lower fuel prices in the near-term and to become energy independent in the long-term.
First we must drill for more oil. We can begin to reduce the cost of oil and end our dependence on foreign oil by drilling in the Arctic National Wildlife Refuge (ANWR) located in Alaska. Opening ANWR to drilling would have a dramatic impact on gas prices, but only a miniscule portion of ANWR would be affected by drilling. The mere announcement that we are going to begin drilling in ANWR would drive oil prices down.
The Outer Continental Shelf (OCS) contains enough oil to replace Middle Eastern oil for sixty years according to the U.S. Mineral Management Services. Yet the federal government allows 80% of the OCS to go unexplored. Studies show that the artificial reefs created by offshore rigs and platforms would benefit marine life. Amazingly, China, with the permission of Cuba, has begun drilling off the coast of Key West, Florida but we refuse to do likewise.
Next, we need greeter refining capacity because a lack of refining capacity keeps oil prices unnecessarily high. Unfortunately, the U.S. has not built a new refinery in more than 30 years. To increase refining capacity, the federal government must encourage, through tax and regulatory policy, the construction of new refineries. Refineries could be built on closed military sites creating jobs and boosting local economies.
Third, all levels of government should abolish gas taxes. Gas is the lifeblood of our economy, yet every tier of government levies a tax on it directly. Indirectly, gas taxes increase the cost of consumer goods because producers pass the inflated fuel costs on to consumers. Because of the overwhelming importance of gasoline to our economy, the federal gas tax should be abolished and local and state governments should not receive federal highway dollars until their gas taxes are eliminated.
To make up for the lost revenue, Congress should end the practice of earmarks, exercise greater oversight of the budgets of federal agencies and end ethanol subsidies which have had the unintended effect of forcing gas prices to go higher. Moreover, the economic growth inspired by the tax cut will replace lost revenue. A temporary suspension of gas taxes is only a short-term solution. The resumption of the tax at the end of the suspension period will feel like a dramatic tax increase to consumers. A permanent ban on gas taxes will give consumers confidence in their economic futures, driving the economy.
Fourth, reduced regulation on gas will lower the price at the pump. According to the Government Accounting Office (GAO), we have more than 40 different blends of gasoline in the U.S. Different states mandate that each gallon of gas sold have a different percentage of biofuel. Producing such a wide variety of gasoline products makes the production and transportation of gasoline less efficient and more expensive. If we got rid of even some of the regulations that require differing blends we could make production more efficient and drive down the price we pay at the pump.

Finally, we must encourage innovation in the private sector as the cornerstone of a long term solution to our dependence on foreign oil. With the right combination of technology, innovation, and government incentives, we can achieve energy independence. I support the creation of large financial prizes to be awarded by the federal government and private foundations to companies and individuals who meet important milestones in achieving America's energy goals. Entrepreneurs are more likely to solve America's energy and environmental problems than bureaucrats in Washington.
Rising gas prices are a heavy burden on the economy. But, we have the opportunity to avert a long-term disaster. With determined leadership we can make the changes in energy policy that will drive America's economy through the 21st century. Four dollars per gallon gas will be remembered as a signpost on the road to energy independence, rather than a serious blow to the American economy if we adopt this bold and comprehensive reform plan.
Kieran Michael Lalor, Republican Candidate for Congress in NY's 19th Congressional District is a former Economics teacher and an Iraq Veteran.